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His Highness Sheikh Tamim bin Hamad Al-Thani The Emir of State of Qatar

Page 4 Table of Contents

Group Structure 11 Key Information 12 Group Vision and Statement of Values 14 Chairman and MD’s Message 17 Board of Directors 21 Board of Directors’ Report 23 History & Heritage 25 Timeline from 1964-2014 28 Group President & CEO’s Message 31 Management Team 35 QIC Group’s Subsidiaries 37

QIC’s 50th Year Event Celebration 49 Corporate Social Responsibility 53 QIC’s Share Performance in 2014 59 Business Performance Overview 61 Insurance 62 Investments 63 Financial Strength 64

Independent Auditor’s Report 67 Consolidated Financial Statements 69 QIC Group’s Global Footprint 133

Page 6 QIC Group Structure & Key Information

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Group Structure

Direct Reinsurance Lloyd’s Life & Asset Real Market Medical Manage- Estate ment

Life and Qatar Economic Qatar Insurance Medical Advisors Company Real Estate QIC Capital QIC International

Epicure Managers QIC Dubai Qatar Ltd.

QIC Abu Dhabi CATCo Investment Management Ltd.

KQIC Kuwait CATCo-Re Ltd.

OQIC Oman LCP Holdings Ltd.

QICI Malta Taleem Advisory Ltd.

QIC Europe Page 10 Page 11 Key Information

QIC QR Million 2014 2013 2012 2011 2010 Gross Premiums Written 5,614 3,532 2,559 2,383 2,153 Underwriting results 664 485 343 338 426 Net profit attributable to parent 1,001 753 610 592 590 Investment Income 1,027 717 555 509 411 Cash and Investments 9,567 8,283 5,566 5,316 5,043 Return on equity (%) 18.4 17.1 17.5 17.7 19.1 Total Assets 16,097 11,633 8,251 7,772 7,237 Equity attributable to parent 5,705 5,187 3,620 3,339 3,339

Our Shares 2014 2013 2012 2011 2010 Earnings per share (QR)* 6.24 4.69 3.80 3.69 3.67

QIC market capitalisation (QR Mn) 14,545 8,541 6,056 5,782 6,206

Dividend per share (QR) 2.5 2.5 2.5 4 6.5

Bonus Share (%) 15% 25% 20% 20% 0

Share price at 31 December (QR) 90.6 66.5 67.9 77.8 83.5

Book value per share (QR) 36 40.39 40.59 44.98 44.97 *Restated for the effect of issuance of Bonus Shares

Financial Strength Rating Standard and Poor’s A.M. Best

Page 12 Page 13 The Group’s Vision of the future is to maintain our drive for growth and excellence through innovation, Group’s Vision diversification and responsible & Statement leadership. By means of existing of Values and new strategic alliances and Chairman partnerships we aim to create the optimum framework for continuous & Managing profitable development. Director’s At QIC Group we value each employee and acknowledge their own distinctive contribution. Message We value their effort, their enterprise, their contribution and opinions.

Our Group is being built on teamwork, respect, and mutual trust. Each person, at whatever level she or he may operate, is empowered and will therefore make their own unique contribution. Each employee is encouraged to be responsible for their own actions. We encourage positive contribution, acknowledge innovation and reward excellence. We encourage a safe workplace, comply with all laws and regulations and strive to meet the expectations and requirements of our customers. We value our customers as trusted partners.

We value constructive feedback and candid comment. We endeavour to absorb these into our business model. Honest criticism is accepted as a valued contribution to our organisation. We meet our obligations to shareholders, customers, employees and society.

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Chairman & Managing Director’s Message

Dear Valued Shareholders, With immense pride and pleasure, I present to you our Annual Report for the year ended 31 December 2014. In this report, we highlight our financial outcomes and prominent developments during 2014. We also elucidate what we hope to achieve in 2015 as we continue towards our objective of obtaining the highest returns for our shareholders and the best products and services for our clients by enhancing our status and performance as the most trusted insurance Group in Qatar and in the “A true testament to QIC’s MENA region.

success lies in its business The year 2014 was truly remarkable as it marked philosophy - to create value fifty years of our operation in the Qatari soil. Recapitulating our journey from the humble and maintain credibility, beginnings at Souq Waqif to the prominent QIC which your Company has building in West Bay where we are headquartered, we feel a sense of accomplishment for reaching been following for over half such a significant milestone. Through these fifty a century. Your Company has years, we have exuded operational excellence and always been acknowledged have carved a niche’ for ourselves in the history of Qatar’s insurance industry, thus contributing for its first-class business positively towards boosting Qatar’s insurance performance and outstanding sector. service delivery.” Page 16 Page 17 In 2014 QIC achieved a net profit of QAR 1001 million, local and regional operations (direct insurance) as a reflecting an increase of 33% on the previous year’s result of the upcoming infrastructure development performance. The return on equity reached 18.5%, projects planned across the region. while earnings per share increased from QAR 4.69 to QAR 6.24. On behalf of the Board of Directors, I would like to express my sincere appreciation and gratitude to Besides recording year-on-year profits, the Group His Highness Sheikh Tamim bin Hamad Al Thani, was highly successful in acquiring the Antares the Emir of the State of Qatar for his visionary Group of companies in a deal which was worth leadership and guidance. more than QAR one billion. Antares along with the Group’s reinsurance arm Qatar Re constitutes the Finally I reaffirm that QIC Group while achieving its key pillars of the Group’s international operations, current and future goals will contribute significantly representing approximately 60% of the overall to the national economy of Qatar, as a part of the Gross Written Premiums at the Group level. nation’s march towards development, progress and fulfillment of Qatar National Vision 2030. While outlining business plans for the next year, Board of the Group has also taken into consideration the Sheikh Khalid bin Mohammed bin Ali Al-Thani targeted expansion in international and reinsurance Chairman & Managing Director Directors’ activities, in addition to the expected growth in Report

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Board of Directors Sheikh Khalid bin Mohammed Mr. Abdulla bin Khalifa bin Ali Al-Thani Al-Attiya Chairman & Managing Director Deputy Chairman

Mr. Hussain Ibrahim Al-Fardan Mr. Jassim Mohammed Al-Jaidah Sheikh Hamad bin Faisal Board Member Board Member bin Thani Al-Thani Board Member

Mr. Khalaf Ahmed Sheikh Jassim bin Hamad Sheikh Khalid bin Hamad Sheikh Saoud bin Khalid Al-Mannai bin Jassim bin Jabor Al-Thani bin Khalifa Al-Thani bin Hamad Al-Thani Board Member Board Member Board Member Board Member

Mr. Khalifa Abdulla Turki Al Subaey Group President & CEO

Page 20 Page 21 BoardGroup’s of Vision Board Directors& Statement of Directors’ of Values Report

As Qatar’s leading insurance Company, we take pride in insuring the nation’s growing infrastructure. In 2014, your Company was proud to lead a six-member consortium of Qatari insurance companies awarded the contract to provide insurance for the construction of Qatar’s integrated rail network- one of the largest single project tunneling and rail construction projects ever embarked upon. Other significant infrastructure projects in which your Company played an important role include the new Hamad International Airport. As a provider of choice in the insurance and reinsurance sectors, your Company has been successful in The directors of Qatar Insurance Company (QIC) are maintaining and developing its prominent position th pleased to present the 50 Annual Report together not only in Qatar, but across the wider MENA region. with the audited financial statements for the year Moreover, through the increased diversification of its ended December 31, 2014 and the business forecasts personal lines offering, your Company continues to be for the year 2015. well placed to meet the insurance needs of all its valued Under the leadership of His Highness the Emir, customers. Importantly, 2014 has been a year in which Sheikh Tamim bin Hamad Al-Thani, Qatar continues your Company has continued to focus on providing steadfastly on its long-term path of sustainable its customers with enhanced service delivery, product economic diversification from hydrocarbons, which innovations and enhancements. This is reflected in the in the past few years has been the primary driver of Company having launched the nation’s first loyalty tremendous economic growth. program “U-Club”. This new and exciting initiative offers a host of benefits to the Company’s customers In preparation for the FIFA 2022 World Cup, the Qatar to thank and reward them for their continued loyalty Government’s investments in large-scale infrastructure and trust. projects is reaching its peak and is driving the economy towards achieving the strategic objectives set out in In line with its channel strategy to reach out to new the Qatar National Vision 2030. Insurance companies customers and grow its existing customer base, in 2014, have a very important role to play in this expansion your Company established new branches in strategic and are becoming an ever more significant part of locations to enhance its service level standards and Qatar’s economy. become more accessible to its customers. The 2014 year will always be cherished as a significant For the QIC Group, the quality, diversity and balance year as your Company celebrated 50 years of of the risk pool is critical to value creation and operational excellence. The journey, from its inception sustainable performance, as it has a direct bearing in 1964, has been truly remarkable and exciting. Over on the profitability and growth opportunities of our the last fifty years, your Company has grown from business. By diversifying geographically and setting being a leader in the domestic market to a leader in the up subsidiaries in strategic international locations, wider MENA region. It is our vision that, by 2030, your your Company has established a global underwriting Company will be among the top fifty global insurers. footprint and a diversified risk portfolio.

Page 23 The acquisition of Antares Holdings Limited (a progress continue to integrate internally recognised specialist insurance and reinsurance Group operating risk, exposure and capital management practices in the Lloyd’s of London insurance market), completed across the Group. in June 2014, represents a significant step forward in QIC Group’s Vision to become a leading international QIC Group has continued to apply global standards insurance and reinsurance Group. This key acquisition in its assessment of the current and future solvency has enabled the Group to further diversify the niche and capital adequacy requirements of the Group, to lines of business it underwrites and enhance its global ensure it remains well positioned and supported as it footprint. The importance of this acquisition and pursues its strategic goals ahead. the significant contribution made to QIC Group by As approved by the shareholders in their meeting on its reinsurance arm, Qatar Re, is reflected by the fact November 23, 2014, the Company has initiated the that approximately 60% of the Group’s overall Gross procedures for the issuance of convertible notes with Written Premiums are derived from these entities. a principal amount of QAR 910 million and is in the Towards the end of 2014, the QIC Group established a process of negotiating the final terms and conditions. wholly-owned non-life insurance subsidiary in Malta, QIC and its guaranteed subsidiaries (including QIC History & following authorisation from the Malta Financial Europe Limited) continue to be rated A /Stable by Services Authority. This important new platform - Standard & Poor’s and A (Excellent) by A.M. Best, QIC Europe Limited (“QEL”) will enable QIC Group to demonstrating the consistent financial strength and Heritage underwrite high quality risks throughout the European ability of these entities to meet their ongoing insurance Economic Area and further enhance its international policy and contract obligations. Antares Managing presence in Europe. Agency Limited (managing Antares Syndicate 1274) Remaining true to its forward-looking business enjoys the Lloyd’s financial strength ratings of A+ philosophy, your Company has delivered on its (Strong) from Standard & Poor’s, A (Excellent) from strategic objectives and has achieved outstanding A.M. Best and AA- (Very Strong) from Fitch Ratings. “It is not the destination, results during the year. For 2015, a key area of focus will be the further but the remarkable journey The Gross Written Premium for your Company grew enhancement of the services we provide to our to QAR 5614 million with a 59% year-on-year growth customers. To this end, we will be holding training of fifty years and enriching (2013: 3531 million). Net Insurance revenue for the year and development programmes to assess and evaluate increased by 37% to QAR 664 million (2013: QAR 485 our service delivery standards. We will also look experiences that have set us million). The investment income grew to QAR 846 forward to roll out to our subsidiary companies the IT million from QAR 582 million in 2013, demonstrating infrastructure improvements developed in 2014. apart.” an increase of 45%. As always, we will continue to ensure that the Group’s By focussing on its core capabilities and expanding in growing operations – both domestic and international areas of high potential, your Company has achieved - remain efficient and cost-effective to ensure that a net profit of QAR 1001 million in 2014, up by 33% we maximise shareholder value and, ultimately, the success of your Company. (2013: 752.935 million) after Board of Directors 1964 marked the beginning of a new era in Qatar’s We take pride in the fact that over the past fifty Remuneration of QAR 22.50 million (2013: QAR 22.50 Your Company takes its social responsibilities insurance industry. Founded in March 1964 by the years, we have always handled our customers’ million) resulting in earnings per share of QAR 6.24 extremely seriously and provides support to the Emiri Decree, QIC sparked the beginning of an claims as promptly as possible, regardless of the (2013: QAR 4.69). community in cultural, sporting and educational size. Our robust performance history has not only initiatives. For this year your Company has allocated enduring legacy in Qatar’s insurance sector. In the midst of a highly dynamic and challenging helped us demonstrate our integrity and credibility, environment, your Company continued to show robust 2.5% of its profits generated within Qatar (QAR 14.822 performance by placing at the heart of its activities its million) towards the social fund established by the Being the oldest and the largest national insurance but has also helped us inherit our customers trust, customers and their requirements for insurance. Government of Qatar. company, we have from the very beginning been faith, reliability and confidence. This has shaped committed to the burgeoning needs of Qatar’s and defined our identity, our business ethics and Against a backdrop of declining oil prices and an The Board also allocated 5% of the profit for the increasingly competitive business environment, your year 2014 towards the special reserve to protect the development. We have painstakingly crafted heritage- something that we deeply treasure. Company continued to generate increased growth company against catastrophic events as was approved innovative insurance solutions to bear risks related in the Annual General Meeting held in February 2010. due to its effective and prudent management of to the growing energy, marine, aviation and property Our S&P’s ‘A’/Stable rating and A.M. Best ‘A’ investments. By delivering consistent yields and by th At the culmination of the 50 year, the directors are and commercial business insurance sector. Casting (Excellent) rating underpins the quality of identifying alternate streams of income, our investment pleased to recommend a cash dividend of QAR 2.50 a spotlight on personal insurance, we have been service and security we have been providing to team has once again proved their mettle in handling per share (2013: QAR 2.5 per share) and a bonus share our customers for over half a century. This has investments. of 15% (3 shares for every 20 shares) (2013: 25%). tailoring insurance solutions for the well-being and safety of Qatar and its people. helped us carve a name in the sands of time. With We consider Enterprise Risk Management (ERM) to be We look forward to 2015 with quiet optimism and unwavering support of our customers, we aspire to a core element in the ongoing success of the Group. hope to achieve progress in all our ventures. Our ERM framework is underpinned by three pillars; We have always delivered on our promises and continue managing both our customers’ risks and capital management, exposure management and risk The Board expresses its sincere gratitude to the have exceeded expectations, reinforcing assurance, their expectations. management. It allows for an integrated approach Government of the State of Qatar for their continued which is an essential component of our business. to the management of insurance, operational, credit, support and guidance towards the progress of market and liquidity risk. During 2014 we made notable QIC. The Board also thanks all its customers and progress in further embedding ERM throughout the shareholders for their continued trust and support and Group and implemented enhancements in the key the management and staff, whose commitment and areas of risk appetite setting and monitoring, exposure dedication have resulted in the continued success of monitoring and control, risk governance, economic the company. capital modeling and risk reporting. 2015 will see this Page 24 Page 25 1960s 1980s

1970s Millenium 2000

Page 26 Page 27 Timeline from 1964-2014 Group President & CEO’s Message QIC Dubai New Premium QIC 1964 branch 1968 Management, 1986 income reached 1990 established established New Vision QAR 100 million

Standard LNG came to QIC Abu Dhabi Declaration of & Poor’s Qatar & QIC 2003 branch 2002 our Millennium 2000 1994 rating was the insurer opened Vision obtained of choice

Oman Qatar Insurance Company established Premium income QIC Qatar 2004 crossed 2006 International 2007 Insurance Group 2008 QIC established QAR 1 billion established established branch in Kuwait

Qatar Re opened Q-Re, our Premium Q Life & branches in specialist income crossed Medical Insurance 2013 Zurich & Bermuda 2012 2011 reinsurance 2009 US$ 1 billion Company LLC & a representative company established office in London established

QIC established QIC Europe Ltd (QEL) QIC’s 50th Anniversary 2014 Antares Acquisition Net profit crossed QAR 1 billion

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Group President & CEO’s

Message “2014 has been a memorable year for QIC as we commemorated fifty golden years of operation. I feel very optimistic about 2015 as we resolve to get closer to our customers and take the business to the next stage of its evolution. Over the last fifty years, we have been highly successful in building a sound platform on which QIC’s future will be built. We look forward to embarking on another exciting journey to further our commitment towards our customers, our employees, our shareholders and the communities we operate in.”

Dear Valued Shareholders, I am delighted to present the key achievements of Qatar strategies within a prudent and acceptable risk management Insurance Group during 2014, a prosperous year that framework. witnessed important developments across the Group, both In 2014, QIC maintained its rating of ‘A’/Stable by S&P and in Qatar and internationally. ‘A’ (Excellent) by A.M. Best. Other subsidiaries of your Completing fifty years of successful operations in 2014 was Company, namely QICI, Qatar Re, QLM, KQIC and QIC a considerable feat and an accomplishment by itself. It is Europe Ltd. have been assigned an ‘A’/Stable rating by S&P, also a testament to our success that we created a robust with QICI and Qatar Re also assigned an ‘A’ (Excellent) rating insurance platform built on outstanding customer service by A.M. Best. Antares Syndicate 1274 benefits from the delivery, product innovation and prudence when it came Lloyd’s financial strength ratings of ‘A’+ (Strong) from S&P, to underwriting risks across continents and investing in ‘A’ (Excellent) from A.M. Best and AA- (Very Strong) from better yielding assets. We believe that the reassurance our Fitch Ratings. This demonstrates clearly your Company’s customers get from our range of products and the comfort, credit worthiness and financial strength to honour all types care and support that we provide when most needed of claims in a timely manner. continues to reinforce the trust they place in us year after Your Company has always been acknowledged for its first- year. class business performance and outstanding customer We have consistently maintained financial security rating of service standards delivering excellence throughout the year. your Company at‘A’which is a reflection of your Company’s This underpins the international best practice which your strong underlying business fundamentals, realised through Company has adopted and continues to follow year after year. focussed and successful execution of its well-defined It also reinforces the fact that our strategies were effective in

Page 30 Page 31 managing the regional and global macroeconomic dynamics of our people is crucial for our expansion and success. which impacted major economies. We also continue to provide access to comprehensive scholarship programmes in order to provide long-term I am pleased to report that during 2014, your Company career development opportunities to Qataris across various demonstrated robust growth and achieved a record net departments of your Company. For example, we offered profit of QAR 1001 million, up from QAR 753 million in 2013, sponsorship to many Qatari students to complete their representing an increase of 33%. Our insurance underwriting graduation in Qatar and in the UK and US. Some of the operations performed well with net underwriting result sponsored students who completed their graduation have of QAR 664 million compared to QAR 485 million in 2013. been recruited in leadership positions in various departments Gross Written Premium for 2014 stood at QAR 5614 million, of your Company. recording an increase of 59% over 2013. Guided by prudent and conservative investment strategy, your Company In 2014, we were highly successful in implementing our continued to generate significant investment income and enhanced IT retail suite of products-‘Anoud’, developed – in other revenues, which grew by 43% during 2014 to QAR 1027 house. Given the success of ‘Anoud’, plans are in place to million. We were successful in increasing our retention ratios enhance the product further and take it forward to implement to 77% vis-à-vis a retention ratio of 70% in 2013. in other lines of business. In line with your Company’s aim to become a leading We consider Enterprise Risk Management (ERM) to be a global insurance group, our acquisition of Antares Holdings core element in the ongoing success of the organisation. Limited (together with its subsidiaries) - a specialist insurer The Group’s ERM framework is underpinned by three and reinsurer operating in the Lloyd’s market, represents a pillars; capital management, exposure management and significant step forward towards the realisation of this vision. risk management and allows for an integrated approach to We have been highly successful in integrating the businesses the management of Insurance, Operational, Credit, Market, both culturally and at an operational level in a very short time Liquidity, and Group Risk. During the course of 2014, we and have managed to benefit from the synergies provided have continued to make giant strides in embedding ERM and by this acquisition. The completion of this acquisition in such have implemented enhancements in risk appetite, exposure Management a short time also provided essential impetus to growth and monitoring and control, risk governance, economic capital stability. modeling and risk reporting. This was further aided by the acquisition of Antares, which helped the Group gain Antares’ acquisition has also given QIC access to the Lloyd’s additional expertise in ERM. 2015 will see this progress Team market, the world’s leading market for writing complex continue further, driven by an intrinsic desire to integrate risk business. This acquisition of a licensed and regulated market leading risk, exposure and capital management Bermudian Class 3 reinsurance entity has also helped practices across the Group, combined with an increasingly broaden the scope and capabilities of the QIC Group and, challenging regulatory environment both in Qatar and in due course, would provide a platform for QIC’s broader outside Qatar. international expansion. In view of this expansion, our underwriting footprint today spans all continents. For 2015, we have developed a well thought out plan, which was approved by the Board of Directors. For the coming As part of the Group’s expansion into the European year, we will focus primarily on overseas growth and will look Economic Area (“EEA”), in November 2014 QIC established to expand beyond the GCC region. In order to have access a wholly-owned non-life insurance subsidiary in Malta named to the requisite funds available for this expansion, we took QIC Europe Limited (“QEL”). QEL is regulated by Malta a conscious decision of entering the bond market in 2014. Financial Services Authority (“MFSA”), a highly regarded Going forward, for the next three years, our area of thrust financial services industry regulator. QEL will benefit from would be to increase the yield of our share capital and the European Union’s ‘freedom of services’ rules and will develop additional streams of income. serve as the Group’s platform to underwrite high quality risks across the EEA. QEL’s European operations will complement Our major thrust going forward will be to enhance our retail QIC International’s domestic non-life insurance operations in portfolio which will enable better utilisation of your capital. Malta. Being a responsible corporate citizen, your Company is a In 2014, our reinsurance arm Q-Re was rebranded as Qatar firm believer in Corporate Social Responsibility (CSR). The Re to demonstrate a fundamental transformation from being Group provides support to all sports activities and initiatives a regional reinsurer to a global reinsurer with reinsurance as a part of its commitment towards the community. Moving hubs in Zurich and Bermuda and a representative office in beyond the role of just being an official sponsor for various London. CSR activities, your Company considers such initiatives as a part of its drive to support and give back to the community. As part of our goal to move closer to our customers and We believe that that the more we grow as a company, the increase accessibility, we are well equipped to penetrate the better placed we are to support more CSR related activities. market both locally and on an international level. We have As part of our commitment, this year too we allocated 2.5% expanded our branch network by adding a new branch of profits generated from our Qatar operations to sponsor and have increased the number of insurance products that such CSR activities. are sold online. Such initiatives are an integral part of our business plan for 2015 and we plan to continue to expand our To conclude, I wish to express my sincere gratitude to His network not only in Qatar but also across the wider region. Highness the Emir, Sheikh Tamim bin Hamad Al-Thani, whose leadership has ensured continued prosperity for the State I strongly believe that the secret to success of your Company of Qatar. We also extend our gratitude to His Excellency, the lies in its people, who run the organisation. Our people Governor of Qatar Central Bank, Sheikh Abdullah Saud Al- are our assets. Bearing that in mind, in 2013, we focussed Thani for his support and counsel. primarily on enhancing our HR related aspects, which we implemented successfully in 2014. Going forward, I am I also wish to express our collective thanks to all our hopeful that 2015 will also be a year of consolidation for key shareholders for their unwavering support, guidance and soft skills related to HR. encouragement. As part of QIC’s Qatarisation initiative, our goal is to be the choicest workplace for skilled and competent Qataris. We continue to put in our best efforts to identify and invest in Khalifa Abdulla Turki Al Subaey our local talent pool. We believe in the maxim that growth Group President & CEO

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Management Team Mr. Khalifa A. Al Subaey Mr. Ali Saleh Al Fadala Group President & CEO Senior Deputy Group President & CEO

Mr. Ali Al Mannai Mr. Sunil Talwar Mr. Ahmed Yousef Deputy Group CEO Deputy Group CEO Senior Advisor to the Group President & CEO

Mr. Ian Sangster Mr. P.E. Alexander Mr. Ewen McRobbie Mr. Gunther Saacke Advisor to the Group Chief Executive Officer – Chief Executive Officer - Chief Executive Officer – President & CEO - QIC Group QIC Qatar QICI Qatar Re

Mr. Salem Khalaf Al Mannai Mr. Fahad Al Mana Mr. Sandeep Nanda Mr. Stephen Redmond Deputy CEO - Q Life & Deputy CEO - QICI Executive Vice President - Managing Director Medical Insurance Co Qatar Economic Advisors Antares Managing Agency Ltd.

Page 34 Page 35 “Our contribution to improve the quality of life for the nationals and residents of Qatar goes beyond just the provision of insurance products. Customers choose QIC to protect their people and prized possessions because they value our familiarity with various markets, product Senior expertise, service delivery and Deputy Group financial stability.” Management President & Team CEO’s Message

with our progress, we have spread beyond the Middle East, and have now positioned ourselves to be known and recognised in the global insurance QIC was the first and reinsurance space. domestic insurance Our internationalisation strategy is aligned to our company founded in mission, which is to be ranked amongst the top fifty global insurers by 2030. Our first international the nascent State of venture dates back to 1968, when we set up our first Qatar. QIC is now a international branch office in Dubai, UAE. Today, our dominant insurer in global footprint is spread across seven countries- Oman, Kuwait, UAE, Malta, UK, Switzerland and Qatar. Bermuda. To elucidate, approximately 60% of our overall written premiums are generated from Qatar Re and Antares, the key pillars of the Group’s international operations.

As a business, insurance is highly ‘service-oriented’ and ‘service-intensive’. Being at the heart of delivering excellent customer service levels, we keep aligning ourselves to be further responsive to For 2015, our key area of focus is to take a conscious the voice of our customers and their evolving needs. step towards international integration. With increasing involvement of enterprises in international Insurance is all about being there for our customers markets, companies need to innovate constantly when they need us most. As a response to market and grow beyond borders to avoid stagnation. demand, and an increasing market share, we have Whilst retaining our leadership role in our home expanded our branch network to include offices in market, we chose to be ambitious and implemented new strategic locations. This is a crucial part of our our well thought out internationalisation strategy initiative to expand our reach to new customers by entering the global insurance and reinsurance and grow our existing customer base. arena. By enhancing our service levels and becoming more Considering the targeted expansion in our accessible to our customers at their convenience, international reinsurance operations, we engaged we have strived consistently to be in sync with the Oliver Wyman and worked closely with them to requirements of local life and businesses in Qatar design and implement our internationalisation and across the globe. strategy, which has been highly successful right from the start. Thus, gathering further momentum

Page 36 Page 37 “As an organisation with deep “In 2014, the Group expanded its roots in Qatar, QIC is dedicated international operations in pursuit of to recruiting and supporting local its strategic objective to establish itself talent and to the wellbeing and as a leading international insurance development of all its staff. We and reinsurance Group. Concurrently, recognise that the continued 2014’s impressive financial success of the Group is dependent performance reflected the Group’s continued growth and stability arising upon attracting and retaining the from the ongoing diversification of its best.” underwriting operations and robust Deputy Deputy performance in investments.” Group CEO’s Group CEO’s Message Message

In November 2014, following regulatory authorisation by the Malta Financial Services Authority, QIC established a fully-owned Malta- based EU subsidiary, QIC Europe Limited (QEL). staff. The benefits to the Group and to the nation as QEL will help the Group enhance its existing a whole of a skilled and dedicated local workforce non-life and specialty insurance footprint in the both today and in the future are clear. European Union (EU). QEL will become a key strategic platform for the Group’s international At the QIC Group we value our longstanding subsidiaries – Qatar Re and Antares – to underwrite association with our customers and we rely on their European Economic Area situated risks. In 2014 views and thoughts on our products and services the Group’s impressive financial performance to ensure we continue to meet their needs. We reflected it’scontinued growth and stability arising are striving constantly to develop and enhance from the ongoing diversification of its underwriting our offering and this has been reflected in the operations and robust performance in investments. establishment of new branch offices in Qatar and significant investment in information technology. These key initiatives are designed to make our The QIC Group has continued to perform an products and services even more accessible to both In 2014, QIC took significant steps forward towards important role in attracting and developing staff existing and new customers. We also recognise that the realisation of its Vision to become a leading from both inside and outside of Qatar. Our success in order to attract and retain our valued customers, global insurance and reinsurance Group. as a Group is to a large extent dependent upon in what is an increasingly competitive marketplace, our ability to attract and retain the right staff and we must continue to be innovative and consider In June 2014, QIC completed the acquisition of we have therefore continued to make a significant how we can enhance our customers’ experience. Antares Holdings Limited (Antares), a leading investment in the education and training of our The introduction in 2014 of Qatar’s first loyalty specialist insurance and reinsurance group operating employees. programme for policyholders of QIC’s car insurance in the Lloyd’s market in the UK. The acquisition demonstrates our commitment to this. of Antares expanded the Group’s existing global As a Group with a long operating history in Qatar, footprint through access to Lloyd’s Syndicate 1274 we share our nation’s view of the importance of The needs and wellbeing of our customers and staff and Antares’ own integrated managing agency, Qatarisation and remain committed to ensuring will again be a key area of focus for the Group in the as well as a Bermudian Class 3 reinsurer. Antares’ the success of this important initiative. In support coming year and we look forward to the continued first class team, specialty capabilities and aligned of this, the Group has invested in the education, success of all our stakeholders. underwriting philosophies afford the Group training and ongoing development of its Qatari tremendous opportunities.

Page 38 Page 39 “Since 1964, we have been delivering on “The common denominator in everything our promises to customers. We resolve we do is the combination of technical skills constantly to go the extra mile to meet and and expertise coupled with our passion and exceed our customers’ expectations. By commitment to meeting the needs of our implementing our strategy of reaching out customers across the global marketplace. to new customers and growing our existing Growing from our physical presence in all customer base, we are already an integral key reinsurance hubs we are offering highly part of local business life in Qatar.” rated security and instant diversification to reinsurance panels, which is distinct from traditional sources of reinsurance capacity.” Message Message from CEO, from CEO, QIC Qatar Qatar Re

The IT system developed by our in-house team now enables us to customise our products to suit customer demands and makes buying insurance easier online. We have also deployed our signature Automated Insurance Machines member of the QIC Group of companies we can (AIMs) at strategic locations in Qatar especially at the Traffic offer highly rated security and instant diversification departments making it easier for individual customers to renew or buy Motor, Travel and Home Insurance. to reinsurance panels, which is distinct from traditional sources of reinsurance capacity. Looking Qatar Rail’s metro project and a myriad of world class mega more closely at our strategy mix, the common projects in line with H.H. Emir’s 2030 Vision are attracting denominator in everything we do is a combination worldwide attention. QIC was retained as the local leader to provide insurance cover for the Qatar Rail project on behalf of of technical skills and expertise coupled with our a consortium of national insurance companies. Government’s passion and commitment to meeting the needs of support of the Qatari national insurance companies is our customers across the global marketplace. noteworthy and deserves our appreciation. This has helped us maximise our risk retention locally while recognising long term partnership of international reinsurance leaders. We consider ourselves as a ‘contemporary’ reinsurer Our golden jubilee year gave us the opportunity to look because we went global right from the beginning back and cherish our long term partnerships with our loyal in order to facilitate the creation of a highly customers, intermediaries and reinsurers, with whom we have enjoyed business relationships that can be traced back diversified, efficient portfolio. This was reflected in to many decades. all areas - our employees, business lines, markets, At QIC, the rate of attrition has been very low. This and locations. The approach has proven to be the demonstrates clearly our underlying philosophy of how we right one. Despite sharply increased complexity value and nurture long-term partnerships both with our customers and our employees. of the operation the Qatar Re team managed to achieve significant growth in a challenging market 2014 was yet another remarkable and exciting year for us Our objectives for 2015 would be to use our service platform Established in 2009, Qatar Re is the reinsurance place within a short period of time. In doing so we to enhance our relationships with our existing customers and as it marked QIC’s golden jubilee. We were successful in arm of QIC. Qatar Re writes all major property, were able to write selectively those risks that fitted achieving our targets in 2014 and were delighted with our increase our branch network in order to be better accessible business performance. Despite prevailing challenges in the to all our customers. Simultaneously, we will continue to casualty and specialty lines of business from its our portfolio and proved to be profitable for us. marketplace, we fared well and maintained our position as enhance our existing products and services to preserve our headquarters in Doha and branch offices in Zurich the market leader. long-term relationships with our customers. and Bermuda. Qatar Re also has a representative In 2015 we expect to generate more profitable office in London. growth from project based opportunities, structured Pursuant to our motto, “to reach out to customers,” we Understanding and acknowledging our customers’ continued to go the extra mile to meet and exceed our requirements have always been instrumental in designing solutions, improved access to and traction in the customers’ expectations. To expand our reach to new innovative insurance solutions. Moving forward, we will Qatar Re is based on three premises. Firstly, we European markets and from expanding global embark on launching more innovative products in the customers and improve our service standards for our pursue an integrated portfolio management presence not least in the Asian markets. Going existing customers, in 2014, we grew our network to include marketplace. We are also looking to enhance our online suite branches in strategic locations. We also launched a range of of insurance products to make customers’ online purchasing approach to underwriting as a key differentiator forward Qatar Re will stay on course. Committed to innovative products, while enhancing our existing portfolio. experience simpler and more convenient. Plans are underway and measure the impact of each risk underwritten servicing our clients and brokers we will continue To foster long term relationships with our customers, we to launch an application for lodging claims using an online on the overall portfolio. Secondly, we provide lead to diversify product offering and strengthen platform. We will also install more AIMs in strategic locations launched a customer loyalty programme, “U-Club”, which quotations based on proprietary pricing capabilities underwriting capabilities. As an employer Qatar Re offers a series of benefits to reward customers for their long- for effective distribution of our products. term association and patronage. In 2014, QIC in conjunction and superior underwriting skills. Thirdly, we continue will continue to invest in its workforce and further with Qatar Mobility Innovations Centre (QMIC) played a We will continue to service the market through product to grow in servicing our clients and brokers from develop the pool of exceptional skills and talent that significant role in assessing drivers’ behaviour patterns innovation, responsiveness, effective distribution and long- our operational platforms established in all key has allowed the company to evolve successfully in term partnerships. Going forward, I am hopeful that our and encouraging safe driving in Qatar by executing a pilot reinsurance hubs. Having become a significant the global market place. project, which will eventually pave the way for a product that ‘customer-focussed’ strategy will continue to serve us well will reduce premiums for cautious drivers. in the years to come. Page 40 Page 41 “By operating across various “QLM operates in one of the subsidiaries, we have gathered a highest-growth economies in the wealth of knowledge and experience in MENA region. We aspire to become managing jurisdictions during adverse the provider of choice for Life and market conditions. In tandem with Health Insurance, which are vital for unmatched underwriting expertise and any human being.” excellent customer service standards, we continue to offer an integrated spectrum of insurance solutions across Oman, Kuwait, UAE and Malta.” Message Message from from CEO, Deputy CEO, QICI QLM

protecting our policyholders. By operating across various subsidiaries, we have gathered a wealth of have ensured to bundle living benefits with death knowledge and experience in managing jurisdictions benefits in a traditional Life insurance policy. during adverse market conditions.

In 2014, QICI reported GWP of QAR 2.874 billion; a Medical insurance is not only used by people growth of 33% vis-à-vis GWP of QAR 2.149 billion in who fall sick, but is also used by individuals to 2013. Remaining true to its forward-looking business ensure wellness. Living a whole and healthy life philosophy, QICI has delivered on its strategic is every human’s right and we ensure that every objectives and hence achieved an improved result individual beneficiary covered by us is protected in over 2013 by 6% in terms of Net Profit. a comprehensive manner and has timely access to the best healthcare services. For 2015, we are bullish in our outlook and believe that the retail market will gain prominence, given For the coming years, our focus will be on growing that the penetration ratio of insurance spend to Life and Medical business with customer centric GDP is relatively low when compared to mature innovative products and services. We are confident markets. Our retail platform, which has been tried and tested over the past few years in Doha is now of achieving new milestones in growth while ready for formal launch and our customers will see enhancing our current product offerings. We are a plethora of new on-line offers this year. 2015 will gearing up for FIFA World Cup 2022 to bring in also witness our deeper integration with our sister specialised package products. companies; Qatar Re and Antares at Lloyd’s and which will allow the direct writers to target and By making QLM as the provider of choice for all Life QICI was established in 2007 and is a subsidiary of provide more informed Commercial Lines products Despite operating out of a highly competitive and Medical insurance solutions, multiplying the the QIC Group. At its inception, QICI inherited from and information across the region. marketplace, QLM retains customers with high- value of shareholders and enhancing the legacy of the Group its branches in Dubai and Abu Dhabi, valued Life and Health insurance products and the Group, we demonstrate our commitment to the plus an insurance agency in Malta. In addition, QICI services by providing them with the most satisfying Group. assumed responsibility for OQIC in Oman and KQIC ownership experience regardless of where they may in Kuwait. be. As both lines of our business -Life and Medical are service intensive and sensitive, we have always We primarily see ourselves as an investor on behalf focussed on our unique service delivery model and of QIC Group for its insurance operations outside Qatar. Our role is to assist our subsidiaries and customer service philosophy and have achieved branches maximise growth in terms of both top commendable success and unprecedented levels of and bottom line whilst remaining true to our core customer satisfaction. principle of prudent underwriting and risk selection. We believe in service excellence and implement At QLM we have ensured that the key differentiation innovative approaches to meet evolving consumer between Group Life and Individual Life is handled needs. We encourage a culture of collaborative with innovative Group underwriting and higher engagement with our employees, integrate non-medical limits. We have always believed that major technological innovations with superior Life Insurance is for living individuals and thus operational practices and are committed to Page 42 Page 43 “We seek to develop and maintain a diverse portfolio of business lines, spread geographically, combining products and distribution with excellent service delivery.”

Message from Managing QIC Director, Antares Real Estate Managing Agency Ltd.

Under its Qatar National Vision 2030, the and lease them on terms exceeding fifteen years. Government of Qatar announced a large number of To exemplify, QICR has already embarked on its infrastructure projects, many of which are already first development project at Al Messilah, a premier underway. Given its dominant position in Qatar, location in Doha, where a 15,000 sq. metre Lulu QIC is at the forefront of addressing the insurance Hypermarket is being constructed. Construction is related needs of these infrastructure projects. already underway and is expected to complete by Antares is looking forward to contributing and being a part of that plan. Since the news of QIC’s end of 2015. acquisition was released in early 2014, Antares has been and continues to be approached with a Simultaneously, plans are underway for the number of business opportunities that it otherwise QIC Real Estate, QICR, along with other sovereign utilisation of the balance land at Al Messilah to would not have seen. as well as private High Net Worth Investors (HNI) develop high end leasable commercial space by seek to acquire real estate assets across the GCC. 2016. Antares – through QIC’s active support – will add Placement is done typically through QIC’s dedicated new products to its existing offerings. Antares is local and international marketing and placement QICR’s criteria for Investments: adopting new ways to bring itself more in line with capabilities. QICR seeks to invest in Grade A income generating QIC to benefit from economies of scale. Antares real estate assets. is well-positioned to see significant benefits from combining the uniqueness of being a business QICR’s real estate portfolio includes prestigious • A typical product could comprise fully leased operating in the Lloyd’s market with the financial landmarks such as the iconic commercial property commercial properties, logistics and warehousing 2014 was a very significant year for Antares, stability and security afforded by QIC. Qatar Financial Centre, from where Qatar Financial facilities in the GCC Free Zone areas or could especially after its acquisition by QIC. As a leading Centre Regulatory Authority operates. include Central Business Districts (CBDs). Good specialist insurance and reinsurance Group tenant covenant with long lease terms typically operating in the Lloyd’s market, Antares writes a diversified portfolio of 12 distinct product lines with QICR set up a GCC Real Estate Fund, which owns exceeding 12 to 18 years and/or land leases in a focus on specialty lines. assets in premier locations across Qatar. The Fund excess of 50 years. The lease should be three was raised by QIC and its partners, thus making times net lease. With the acquisition of Antares, QIC immediately provisions for seed capital as well as working funds, • Investment horizon ranging between five to seven gained a foothold in the Lloyd’s market and access which are necessary for Management support and years. to markets outside the MENA region. Antares development of similar Real Estate projects. The • Entry yield of circa 10%. also offers QIC a Bermudian platform with a Fund currently has Real Estate assets worth circa • Transparent ownership regulations. Class 3 reinsurance license. Through this bilateral USD 100 million and is capped at USD 300 million. relationship, Antares aims to share knowledge and The Fund’s life cycle is for approximately five years, • Each ticket size is approximately USD 25 to 30 specialty product expertise with QIC to design the with a possible maximum extension of two years. million. best possible insurance solutions for its domestic and regional clients. QICR is keen to develop leasable real estate in Qatar QICR partnered with reputable Retail facilities and and is seeking to partner with major operators in premium Healthcare providers in Qatar as well as the country to jointly identify such areas of co- with other GCC countries to develop properties operation. Page 44 Page 45 QIC Real Estate QIC’s 50th Anniversary

Page 46 Page 47

Semi-centennial celebration at Four Seasons Hotel: QIC’s journey started in 1964, when a group of ambitious entrepreneurial Qatari businessmen founded the first national insurance company in Qatar. With the support and guidance that was extended by the Government of Qatar, QIC commenced operations with a paid-up capital of 1.5 million Indian Rupees. Since its inception, QIC has been the powerhouse of growth and has grown both in structure and complexity from being a leader in the domestic market to a leader in the entire MENA region. Today, QIC’s market capitalisation is in excess QIC’s 50th of USD 3.5 billion. Year Event Celebration

To share its journey of challenges, successes and The lavish evening was opened with an outstanding achievements, QIC celebrated its golden jubilee on performance of Arabic Jazz music, which 16th February 2014, at the iconic Four Seasons Hotel blended and complemented well with the glitzy, in Doha. The event was patronised by the Governor highbrow event and sumptuous dinner. To mark of Qatar Central Bank (QCB), H.E. Sheikh Abdulla the celebration with a touch of spectacle, an bin Saoud Al-Thani along with other excellencies, outstanding display of fireworks left the audience ministers, ambassadors, Sheikhs and eminent completely enthralled. A highly renowned magician dignitaries, who graced the occasion with their from the GCC kept the audience engaged and presence. entertained with his magic and showmanship throughout the evening. Page 48 Page 49 QIC’s 50th Year Event Celebration Corporate Social Responsibility

Page 50 Page 51

Corporate Social Responsibility

Our Corporate Conscience We comply with the law, ethical standards and international norms for implementing CSR and walk the extra mile to engage in activities that further a social commitment and support a good cause. Being a responsible corporate citizen, we embrace accountability for corporate actions and strive to encourage a positive impact on our community, the environment, and our stakeholders including our customers, employees, shareholders and investors. CSR is synonymous with our Statement of Values Aligning CSR to support QNV 2030 and echoes what QIC Group stands for. Moving With booming businesses and an up surging beyond sponsorships, we believe in nurturing economy, companies in Qatar are paving the way to beneficial partnerships to develop impactful CSR put themselves on the map for their drive towards initiatives to exchange best practices and share Corporate Social Responsibility (CSR). Qatar winning strategies. Insurance Group being a responsible corporate citizen is no different from the rest. Being the CSR Engagements in 2014 largest flagship insurer across Qatar and the MENA Being a national insurance company, we take region, QIC Group has carved out a distinctive pride in extending full support to all initiatives approach towards CSR by investing in Qatar’s related to promoting sports, innovative enterprises most significant resource – its people, who are the and approaches to inspire our youth in taking a torchbearers and will aid in realising Qatar National proactive role in shaping the development of our Vision (QNV) 2030. nation. We define budgets and plan our corporate activities to demonstrate our commitment to all At QIC Group, we acknowledge and whole- activities related to CSR. heartedly support all CSR activities and initiatives as We deploy expertise, technology, financial a part of our commitment towards the community. resources and build strategic partnerships to We understand the need to develop and sustain help build thriving, prosperous communities that a social platform for supporting the four pillars of improve people’s lives and support our business. QNV 2030. In fact, our core values underpin the Our CSR model is focussed on building partnerships importance of aligning our strategies to accomplish with organisations to create a lasting legacy that 2030 Vision. contributes to the fulfillment of QNV 2030. We pursue various initiatives to encourage a healthy lifestyle through sports and promote road safety by organising road safety contests.

Page 52 Page 53 Corporate Social Responsibility

had a spectacular end and QIC’s employees secured the first runner up position. • Qatar Handball Association: QIC has a sponsorship agreement with Qatar Handball Association for three consecutive years to extend its support for all activities. • Al Rayyan Sports Club: QIC signed a contract for three seasons starting 2013 till 2016 with Al Rayyan Sports Club to sponsor their first football team.

Sports Healthcare • Official tournament insurer for Commercial Bank QIC supported Qatar Cancer Society: Qatar Master’s Golf Tournament: To increase public awareness about cancer and its Since 2008, QIC has been the official tournament prevention at local, regional as well as international insurer of Commercial Bank Qatar Masters Golf levels, QIC extended its support to Doha Rugby th Tournament. By being the tournament insurer for Clubs on 7 February, 2014 for Think Pink Charity the eighth year in a row, QIC demonstrates its Day. The Rugby match was organised to raise funds continued commitment to local sporting events for Qatar Cancer Society. The event was marked and to raising Qatar’s regional and global profile with great success as QAR 45,000 was raised for in support of the Qatar National Vision 2030. charity purposes. • Official sponsor for AGM of AGU: QIC partnered with Asian Gymnastics Union Road Safety (AGU) to be the official sponsor of their Annual Safe Driver Contest: General Meeting, which was held in Doha between QIC in conjunction with Qatar Mobility Innovations 8-10th of December. Centre (QMIC) organised a pilot project to test the • Main sponsor for Qatar Masters Open Chess implementation of intelligent telematics platform Tournament: as a means to assess drivers’ behaviour patterns for QIC partnered with Qatar Chess Association three months. This pilot project also paved the way (QCA) to be the main sponsor for Qatar Masters for improving road safety, which is a key priority in Open Chess Tournament, which started from 25th Qatar and the wider region. November and continued till 5th December, 2014. At QIC, we believe in the tenet that that the more • QIC Football: we grow as a Group, we would be better poised to In 2013 QIC organised a football tournament for support more CSR activities in the future. Starting the insurance fraternity in Qatar. Besides serving 2015, we resolve to strive harder to become a as a platform to network, the match also helped to leading corporate citizen and have measurable build team spirit amongst the players. The match impact on the society and on our future generation.

Page 54 Page 55 CSR at QIC QIC’s Share Performance in 2014

Page 56 Page 57

• The performance of GCC markets was largely mixed with the Qatar market gaining the highest

• QIC shares outperformed compared to the QE Index and QE Insurance index QIC’s Share Performance in 2014

and consumer sectors. Saudi Arabia, the largest oil producer in OPEC, posted a loss of 2.4% in 2014 as Saudi’s petrochemical sector declined over 22%. In 2014, the Kuwait market was the worst performer in the region, losing ground by 13.4%. The Oman market was down 7.2% during the year, as all sectors reported negative returns. The Bahrain market reported 14.2% rise during the year.

In 2014, the Qatar market was the top performing market in the GCC region and was among the top GCC markets’ performance was mixed bag in 2014 10 best performing indices in the world. The strong Global markets witnessed an eventful year, with some performance compared to GCC peers can largely markets reporting strong results despite increased be attributed to a robust infrastructure pipeline, geopolitical risks, lower than expected recovery in coupled with lesser reliance on crude oil prices, the global economy, uncertainty in timing and effect as the country’s major revenues arise from non- of macroeconomic policies in major economies and hydrocarbon activities and LNG exports. Additionally, volatile oil prices. The S&P 500 index gained 11.4% Qatar’s economy continued to grow at a healthy in 2014, reflecting continued improvement in the US pace with Q3 2014 real GDP growing at 6.0% on an economy on the back of continued fall in debt levels annual basis. Non-hydrocarbon sector growth was and improving consumer sentiments. In 2014, MSCI resilient, with 12% rise reported during Q3 2014. This World Index grew marginally by 2.9%, while MSCI growth helped in making up for the slowdown in Emerging Market was down 4.6%. the oil sector, which contracted by 2.8% in Q3 2014. Further, Qatar enjoys significant budget surplus build GCC markets reported mixed performance in 2014 over the past decade, helping the country to diversify with Qatar and Dubai markets reporting double digit its economy from the traditional hydrocarbon sector gains, while largest market in the region, the Saudi to non-hydrocarbon sectors. Recent falls in oil prices Arabia market posted a 2.4% decline. The Qatari might have a temporary impact on the country’s and Dubai markets posted 18.4% and 12.0% annual budget surpluses. However, in the coming years, returns, helped by a further upgrade to emerging the non-hydrocarbon sector is expected to play an market status, this time from S&P Dow Jones. important role as infrastructure remains a priority. Separately, MSCI’s move to increase the weighting of Infrastructure spending would remain the backbone the two countries in its Emerging Market Index also of non-hydrocarbon sector growth, supported by helped encouraging demand from foreign investors. rising population and increased spending. With over Bloomberg GCC index closed flat erasing the most US$182 infrastructure spend budget between 2014 of the gains recorded in the first half. Among other and 2018, new projects to the tune of US$30 billion GCC markets, the Abu Dhabi market also reported are lined up in 2015. gains of 5.6%, driven by gains posted by banking Page 58 Page 59 Business Performance Overview

By focusing on its core capabilities and expanding QIC’s share in areas of high potential, QIC has achieved a The performance of QIC shares remained strong net profit of QAR 1.001 billion in 2014 ,up by 33% outperforming the QE index and the QE Insurance (2013: 752.935 Million) after Board of Directors index. In 2014, QIC share provided a healthy 70.3% Remuneration of QR 22.50 Million (2013: QR 22.50 gain as against 18.4% rise reported by the QE index, Million) resulting in Totalearnings AssetsTotal per Assets(QR share Millions) (QR of Millions)QR 6.24 meaning an outperformance of 51.9%. During the Net ProfitNet Attributable Profit Attributable to Parent to Parent (QR Millions)(QR Millions) (2013: QR 4.69). 20,000 period, the QE insurance index was up 69.4%. Our 20,000 1,200 share price closed at its high of QR 100.5 on 2 1,200 Net Profit Attributable to Parent Total Assets (QR Millions) 16,097 16,097 October 2014, while at the end of 2014, the share 1,001 1,001 (QR Millions) 1,000 20,000 1,000 15,000 15,000 price was QR 90.6. QIC shares offered a total return 1,200 of 75.5%, compared to QE Index return of 23.4%. Remaining true to its forward-looking business753 753 11,633 16,097 QE Index With the massive infrastructure development planned 800 800 11,6331,001 philosophy, QIC has delivered on its strategic 1,000 The QE Index, formerly known as DSM20 Index, is a over the coming years, the insurance sector in Qatar 15,000 592 610 10,000 10,000 objectives and has achieved outstanding590600592 590results610 8,252 8,252 capitalisation weighted index of the 20 most highly is likely to be the key beneficiary. Additionally, the 600 7,772 7,772753 during the year. 800 11,633 capitalised and liquid companies traded on the Qatar insurance sector growth is expected to be fuelled by 7,237 7,237 Exchange. The index was developed with a base rising population in Qatar coupled with low insurance 400 400 592 610 10,000 The Gross Written Premium for QIC grew to QAR 600 590 8,252 level of 1,000 as of December 31, 1999. A 15% cap is penetration levels. Other key catalysts, such as 5,000 5,000 7,772 5.614 billion with a 59 % year on year growth (2013: 7,237 applied to an individual constituent’s weight in the insurance awareness in the region, are also expected 200 200 3.531 billion). Net Insurance revenue for the year 400 index, which is rebalanced semiannually. to improve. increased by 37 % to QR 664 Million (2013: QR 485 5,000 0 0 0 0 Million). Investment and other income2010 was2011 QR.20102012 1,02720112013 201220142013 2014 200 2010 20112010201220112013201220142013 2014 Million (2013: QR 717 million) higher by 43%. 205 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Net Profit Attributable to Parent Total Assets (QR Millions) 170 (QR Millions) 20,000 Market MarketCapitalization Capitalization (QR Millions) (QR Millions) Net EquityNet (QREquity Millions) (QR Millions) 1,200 18,000 18,000 16,097 6,000 1,001 6,000 5,705 5,705 135 1,000 15,000 14,545 14,545 Market Capitalization (QR Millions) Net Equity (QR Millions) 15,000 15,000 5,187 5,187 18,000 753 11,633 6,000 800 12,000 12,000 5,705 14,545 100 15,0004,000 4,000 3,620 3,620 5,187 10,000 590 592 610 8,252 3,339 3,3393,339 3,339 600 7,772 8,541 8,541 9,000 9,000 7,237 12,000 6,206 6,206 6,056 6,056 4,000 3,620 65 400 6,0005,782 5,782 6,000 2,000 2,000 8,541 3,339 3,339 5,000 9,000

200 3,000 3,000 6,206 6,056 31-Dec-13 31-Jan-14 28-Feb-14 31-Mar-14 30-Apr-14 31-May-14 30-Jun-14 31-Jul-14 31-Aug-14 30-Sep-14 31-Oct-13 30-Nov-14 31-Dec-14 5,782 6,000 2,000 QATI QD Equity DSM Index QINS Index 0 0 0 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 20112010201220112013201220142013 2014 3,000 2010 20112010201220112013201220142013 2014 Page 60 Page 61 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Net UnderwritingNet Underwriting Results Results (QR Millions)(QR Millions) Gross Premium (QR Millions) 800 800 Market Capitalization (QR Millions) Net Equity (QR Millions) Gross Premium (QR Millions) 6,000 Net Underwriting Results 18,000 6,000 5,614 664 5,614 664 (QR Millions) 6,000 5,705 14,545 5,000 5,000 Gross600 Premium600 (QR Millions) 800 15,000 5,187 6,000 4855,614 485 664 4,000 4,000 3,532 3,532 426 426 12,000 2,559 2,559 5,000 400 400 600 4,000 3,620 3,000 3,000 338 343338 343 2,383 2,383 3,339 3,339 485 8,541 2,153 2,153 4,000 9,000 3,532 426 2,000 2,000 6,206 200 2002,559 400 6,056 3,000 338 343 6,000 5,782 1,000 2,383 2,000 1,000 2,153 2,000 200 3,000 0 0 0 0 2010 20112010201220112013201220142013 2014 2010 20112010201220112013201220142013 2014 1,000

0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Net Underwriting Results (QR Millions) Gross Premium (QR Millions) 800

6,000 5,614 664

5,000 600 485 4,000 3,532 426 2,559 400 3,000 338 343 2,383 2,153 2,000 200 1,000

0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Net Profit AttributableNet Profit to AttributableParent to ParentTotal Assets (QRTotal Millions) Assets (QR Millions) (QR Millions) (QR Millions) 20,000 20,000 1,200 1,200 16,097 16,097 1,001 1,001 1,000 1,000 15,000 15,000

753 753 800 800 11,633 11,633

592 610 10,000 10,000 590 592 610600 590 8,252 8,252 600 7,772 7,772 7,237 7,237

400 400 5,000 5,000

200 200

0 0 0 0 2010 2011 2012 2013201020142011 2012 2013 2014 2010 2011 2012 2013201020142011 2012 2013 2014 Insurance Investments

Market CapitalizationMarket (QR Capitalization Millions) (QR Millions)Net Equity (QR Millions)Net Equity (QR Millions) 18,000 18,000 6,000 6,000 5,705 5,705 14,545 14,545 15,000 15,000 5,187 5,187

12,000 12,000 4,000 3,624,0000 3,620 3,339 3,339 8,541 8,541 3,339 3,339 9,000 9,000 Investment & Treasury (QR Millions) 6,206 6,056 6,206 6,056 12,000 12% 5,782 6,000 5,782 10.0% 10.7% 6,000 2,000 2,000 9.6% 10,000 8.7% 10% 8.1% 9,567 3,000 8,283 3,000 8,000 8% Gross Premium Written Domestic Vs International and Regional 5,043 5,316 5,566 0 0 0 0 6,000 6% 2010 2011 2012 2013201020142011 2012 2013 2014 2010 2011 2012 2013201020142011 2012 2013 2014 24% 4,000 4%

2,000 1,027 2% 411 509 555 717 Domestic Net UnderwritingNet Results Underwriting Results 0 0% (QR Millions) (QR Millions) 2010 2011 2012 2013 2014 International 76% Invested Assets Investment Income Yield on Investments Gross Premium Gross(QR Millions) Premium (QR Millions) 800 800 & Regional 6,000 6,000 5,614 5,614 664 664 Investment Results QR Mn 2014 2013 2012 2011 2010 5,000 5,000 600 600 Gross Premium Written Interest income 189.49 145.24 124.49 92.47 118.85 485 485Line of Business 4,000 4,000 Dividends 110.41 104.79 86.72 87.33 76.43 3,532 3,532 426 426 2,559 400 Profit on sale of investments 540.85 282.19 207.22 261.58 192.89 2,559 400 338 3,000 3,000 338 343 343 12% 17% 2,383 2,383 Marine & Rental income 49.85 47.11 49.12 46.62 38.23 2,153 2,153 Aviation Advisory fee income 116.10 75.99 56.23 21.74 7.82 2,000 2,000 200 200 P&C Gain on sale of investment - 14.77 - - - 1,000 1,000 properties Health & Life 71% Others 24.82 48.05 31.58 (1.20) (11.39) 0 0 0 0 Impairment (4.03) (0.75) - - (12.20) 2010 2011 2012 2013201020142011 2012 2013 2014 2010 2011 2012 2013201020142011 2012 2013 2014 Total 1,027.49 717.39 555.37 508.54 410.63

Investment properties 9% Ratio Analysis Bank deposits % 2014 2013 2012 2011 2010 15% Shares and Retention Ratio 77 70 61 58 54.1 Distribution of equity funds 39% Net technical reserves/net premium 117 99 109 105.1 96.4 investments by type written Fixed income Net loss reserves/net premium written 66 54 69.5 64.9 54 securities 37%

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6,206 Financial Strength Independent Auditor’s Report

Analysis of our capital structure Maintaining adequate levels of capital has always been of prime concern to Management Financial strength rating for QIC of QIC-Group. The structure of the investment portfolio Rating agency Rating Outlook is governed by covering net Standard & Poor’s A Stable technical liabilities with ready liquid investments in strongly A.M. Best A (Excellent) Stable rated securities, and the funds beyond this are invested and tightly managed in a mix of equities and funds.

Capital Structure % 2014 2013 2012 2011 2010 Invested assets to net technical re- 188 339 329.2 365.5 450.2 serves Cash and bank deposits to net tech- 52.1 137.2 125.6 143.1 154.5 nical reserves

Group Equity QR Mn 2014 2013 2012 Share capital 1,605.40 1,284.32 891.89 Legal reserve 1,408.18 1,304.29 464.36 General reserve 287.00 287.00 287.00 Catastrophe special reserve 227.25 189.61 159.09 Fair value reserve 601.00 750.87 663.50 Retained earnings 1,575.95 1,371.36 1,154.52 Equity attributable to the parent 5,704.78 5,187.45 3,620.35 Non-controlling interests 218.73 194.23 172.26 TOTAL EQUITY 5,923.51 5,381.69 3,792.61

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Independent Auditor’s Report

The Shareholders Qatar Insurance Company S.A.Q. Auditor’s Responsibility Doha, Qatar Our responsibility is to express an opinion on these consolidated financial statements based on our Report on the consolidated financial statements audit. We conducted our audit in accordance with We have audited the accompanying consolidated International Standards on Auditing. Those standards financial statements of Qatar Insurance Company require that we comply with ethical requirements S.A.Q. (the “Company”) and its subsidiaries (the and plan and perform the audit to obtain reasonable “Group”), which comprise the consolidated statement assurance whether the consolidated financial of financial position as at December 31, 2014 and statements are free from material misstatement. the related consolidated statements of income, comprehensive income, changes in equity and cash An audit involves performing procedures to obtain flows for the year then ended, and a summary of audit evidence about the amounts and disclosures in significant accounting policies and other explanatory the consolidated financial statements. The procedures information. selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement Management’s Responsibility for the Consolidated of the consolidated financial statements, whether due Financial Statements to fraud or error. In making those risk assessments, Management is responsible for the preparation and the auditor considers internal control relevant to fair presentation of these consolidated financial the Group’s preparation and fair presentation of statements in accordance with International Financial the consolidated financial statements in order to Reporting Standards and the applicable provisions design audit procedures that are appropriate in the of Qatar Commercial Companies Law, and for such circumstances, but not for the purpose of expressing internal control as management determines is an opinion on the effectiveness of the Group’s necessary to enable the preparation of consolidated internal control. An audit also includes evaluating financial statements that are free from material the appropriateness of accounting policies used and misstatement, whether due to fraud or error. the reasonableness of accounting estimates made Page 66 Page 67 Independent Auditor’s Statement of As at December 31, 2014 Report financial position (Continued)

Notes 2014 2013 (QR ‘000) (QR ‘000) ASSETS Cash and cash equivalents 6 2,646,907 3,351,905 Insurance and other receivables 7 2,820,028 1,164,615 Reinsurance contract assets 8 3,251,457 2,151,318 Equity accounted investments 9 77,065 81,611 Investments 10 6,468,082 4,462,270 Investment properties 11 375,070 387,197 Property and equipment 12 38,665 33,592 Intangible assets 13 274,895 -- by management, as well as evaluating the overall Other legal and regulatory requirements Goodwill 5 145,111 -- presentation of the consolidated financial statements. We are also of the opinion that proper books of TOTAL ASSETS 16,097,280 11,632,508 account were maintained by the Company. We have LIABILITIES We believe that the audit evidence we have obtained obtained all the information and explanations which Short term borrowings 14 182,000 746,200 is sufficient and appropriate to provide a basis for our we considered necessary for the purpose of our audit. Provisions, reinsurance and other 15 1,660,759 910,005 audit opinion. To the best of our knowledge and belief and according payables to the information given to us, no contraventions of Insurance contract liabilities 8 8,331,014 4,594,615 Opinion the Qatar Commercial Companies Law No. 5 of 2002 TOTAL LIABILITIES 10,173,773 6,250,820 or the Articles of Association were committed during In our opinion, the accompanying consolidated EQUITY financial statements present fairly, in all material the year which would materially affect the Group’s Share capital 16 1,605,404 1,284,323 respects, the financial position of the Group as at activities or its financial position. Legal reserve 17 1,408,179 1,304,293 December 31, 2014 and its financial performance and cash flows for the year then ended in accordance with General reserve 18 287,000 287,000 International Financial Reporting Standards. Fair value reserve 19 601,000 750,868 Catastrophe special reserve 20 227,251 189,606 Retained earnings 1,575,949 1,371,364 Equity attributable to owners of the 5,704,783 5,187,454 Company Non-controlling interests 218,724 194,234 Muhammad Bahemia TOTAL EQUITY 5,923,507 5,381,688 Partner TOTAL LIABILITIES AND EQUITY 16,097,280 11,632,508 License No. 103 Doha – Qatar For Deloitte & Touche These consolidated financial statements were approved by the Board of Directors and signed on its behalf by the following signatories on January 27, 2015. 27th January 2015 Qatar Branch

H.E. Sheikh Khalid bin Mohammed bin Ali Al-Thani Khalifa Abdulla Turki Al Subaey Chairman and Managing Director Group President and Chief Executive Officer

The attached notes are an integral part of these consolidated financial statements Page 68 Page 69 Statement of Statement of For the year ended December 31, 2014 For the year ended December 31, 2014 comprehensive income income

Notes 2014 2013 Notes 2014 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Gross premiums 21 (a) 5,613,767 3,531,707 Profit for the year 1,025,410 778,357 Premiums ceded to reinsurers 21 (a) (1,273,834) (1,060,824) Other comprehensive income Net premiums 4,339,933 2,470,883 Net changes in fair value of (153,255) 85,370 Movement in unexpired risk reserve 21 (a) (661,589) (496,798) available-for-sale financial assets Net earned premiums 3,678,344 1,974,085 Total comprehensive income for 872,155 863,727 the year Gross claims paid 21 (a) (3,123,899) (1,826,224) Total comprehensive income attributable to: Reinsurance recoveries 21 (a) 1,323,220 801,749 Owners of the Company 851,207 840,307 Movement in outstanding claims 21 (a) (606,001) (255,791) Non-controlling interests 20,948 23,420 Net commission expense 21 (a) (620,093) (211,301) Total comprehensive income for Other insurance income 21 (a) 12,277 2,231 872,155 863,727 the year Net underwriting result 663,848 484,749

Investment income 22 846,255 582,355 Advisory fee income 116,100 75,992 Rental income 49,847 47,113 Other income 2,622 723 Total income 1,678,672 1,190,932 Operating and administrative ex- 23 (638,602) (400,383) penses Depreciation and amortisation (27,324) (23,400) Profit before share of results from 1,012,746 767,149 equity accounted investments Share of profit from equity account- 12,664 11,208 ed investments Profit for the year 1,025,410 778,357 Attributable to: Owners of the Company 1,001,833 752,935 Non-controlling interests 23,577 25,422 Earnings per share 1,025,410 778,357 Basic and diluted earnings per share in Qatari Riyals (2013: Restated as a 24 6.24 4 .69 result of bonus) Cash dividend per share in QR 25 2.50 2.50

The attached notes are an integral part of these consolidated financial statements Page 70 The attached notes are an integral part of these consolidated financial statements Page 71 ------8,435 8,093 3,660 85,370 962,614 872,155 872,155 778,357 863,727 (14,822) (12,848) Total 3,792,613 (327,267) 1,025,410 1,025,410 (232,853) 5,381,688 (153,255) 5,923,507 (QR ‘000) (QR equity ------1,635 Non- 8,435 8,093 23,577 (6,186) 25,422 23,420 20,948 (2,629) 172,259 (2,002) (9,880) 218,724 194,234 interests (QR ‘000) (QR controlling controlling ------Statement of For the year ended December 31, 2014 3,660 87,372 87,372 For the year ended December 31, 2014 ended December the year For (1,635) 851,207 851,207 962,614 752,935 (14,822) (12,848) 840,307 (321,081) (321,081) 1,001,833 1,001,833 5,187,454 5,187,454 (222,973) 3,620,354 5,704,783 (QR ‘000) (QR the parent cash flows (150,626) Attributable Attributable to owners of owners to ------3,660 (3,074) 752,935 752,935 (91,373) (14,822) (12,848) 1,154,517 (30,516) (37,645) Notes 2013 (321,081) (321,081) 2014 earnings 1,001,833 1,001,833 (178,378) Retained Retained 1,371,364 (103,205) (103,205) (222,973) 1,575,949 1,575,949 (QR ‘000) (QR (QR ‘000) (QR ‘000) OPERATING ACTIVITIES ------Profit for the year 1,025,410 778,357 30,516 37,645 Adjustments for : special 227,251 reserve 159,090 189,606 189,606 Depreciation of property and equipment and

(QR ‘000) (QR 25,878 23,400 investment properties Catastrophe Amortisation of intangible assets 1,446 ------Impairment loss on investments 3,280 745 758 Share of profit from equity accounted investments (12,664) (11,208) 87,372 87,372 87,372

reserve Investment income and other finance income 663,496

750,868 750,868 (896,102) (691,695) 601,000 (150,626) (150,626) Fair value value Fair (QR ‘000) (QR Impairment loss on doubtful receivables 6,056 6,253 Provision for employees’ end of service benefits 12,002 9,205 ------Net foreign exchange gain on property and equipment 256 -- Gain on sale of investment property -- (14,771) reserve

General General Net unrealised gain on investments

287,000 -- (13,765) 287,000 287,000

(QR ‘000) (QR Operating profit before working capital changes 165,562 86,521 Working capital changes ------Change in insurance and other receivables (914,502) (467,473) 681 Change in insurance reserves – net 1,268,851 752,589 Legal Legal 91,373 reserve 103,205 103,205

748,560 Change in provisions, re-insurance and other payables 236,826 83,133 464,360 1,408,179 1,408,179 1,304,293 (QR ‘000) (QR Cash generated from operations 756,737 454,770 Payment of social and sports fund contribution -- (10,313) ------Employees’ end of service benefits paid (1,296) (2,569) Net cash generated from operating activities 755,441 441,888 Share 321,081 capital 891,891 178,378

214,054 INVESTING ACTIVITIES 1,284,323 (QR ‘000) (QR 1,605,404 Net cash movements in investments (460,252) (1,430,777) Purchase of property and equipment (14,725) (16,533) Purchase of investment properties (668) (1,332) Net cash outflow on acquisition of a subsidiary (1,015,188) -- Disposal proceeds of equity accounted investments 7,500 -- Dividend received from equity accounted investment 9,710 -- Interest income and other finance income 896,102 691,695 Proceeds from sale of property and equipment -- 4,376 Proceeds from sale of investment properties -- 54,597 Net cash used in investing activities (577,521) (697,974) Dividends paid to non-controlling interests (6,186) (9,880) Increase in non-controlling interest 8,093 8,435 Increase in share capital through rights issue -- 962,614 Short term borrowings (564,200) 746,200 Dividends paid (320,625) (223,254) Net cash (used in)/ generated from financing activities (882,918) 1,484,115 Net (decrease)/increase in cash and cash equivalents (704,998) 1,228,029 Cash and cash equivalents at the beginning of the year 3,351,905 2,123,876 Cash and cash equivalents at the end of the year 6 2,646,907 3,351,905 Balance as at December 31, 2014 December as at Balance Effect of acquisition/sale of stake in a subsidiary of stake of acquisition/sale Effect minority by Transfer to catastrophe special reserve catastrophe to Transfer Contribution to social and sports fund to Contribution Increase in non-controlling interest in non-controlling Increase Share option reserve adjustment at a subsidiary at adjustment option reserve Share Transfer to legal reserve to Transfer Issuance of bonus shares Issuance Dividend for the year 2013 the year Dividend for Total comprehensive income for the year comprehensive Total Net unrealized loss on available for sale for on available loss Net unrealized investments Total profit for the year for profit Total Balance as at December 31, 2013 December as at Balance Transfer to catastrophe special reserve catastrophe to Transfer Contribution to social and sports fund to Contribution Increase in non-controlling interest in non-controlling Increase Transfer to legal reserve to Transfer Issuance of right shares Issuance Issuance of bonus shares Issuance Dividend for the year 2012 the year Dividend for Total comprehensive income for the year comprehensive Total Net unrealized gain / (loss) on available for sale for on available gain / (loss) Net unrealized investments Profit for the year the year for Profit Balance as at January 1, 2013 as at Balance Statement Statement of changes in equity Page 72 The attached notes are an integral part of these consolidated financial statements Page 73 Notes to the consolidated financial statements

1. STATUS AND OPERATIONS Qatar Insurance Company S.A.Q. (the “Parent Company”) is a public shareholding company incorporated in the State of Qatar in 1964 under Commercial Registration No. 20 and governed by the provisions of the Qatar Commercial Companies’ Law. The Parent Company and its subsidiaries (the “Group”) are engaged in the business of insurance, reinsurance, real estate and financial advisory services. The Group operates in the State of Qatar, United Arab Emirates, Sultanate of Oman, State of Kuwait, United Kingdom, Switzerland, Bermuda and Malta. The consolidated financial statements incorporate the financial information of the Parent Company and its subsidiaries all of which having December 31st as financial year end. The details of subsidiaries are given below:

Name of the subsidiary Ownership Country of Principal activities Name of the subsidiary Ownership Country of Principal activities incorporation incorporation QIC International L.L.C. 84.60% State of Qatar Primarily engaged in insurance and reinsurance QICI Qatar Insurance Com- 100% State of Qatar Primarily engaged in Real Estate activities in the State (“QICI”) manages the international operations of the Group pany Real Estate S.P.C. of Qatar and has 2 overseas branches in Dubai and Abu Dhabi Qatar Advisors S.P.C. 100% State of Qatar Primarily engaged in financial and other advisory ser- (United Arab Emirates) (QEA) vices Oman Qatar Insurance 70% (owned Sultanate of Primarily engaged in insurance and reinsurance Qatar Insurance Group 100% State of Qatar Primarily engaged in the management of QIC Group Company (“OQIC”) through QICI) Oman S.P.C entities. Kuwait Qatar Insurance 82.04% (owned State of Kuwait Primarily engaged in insurance and reinsurance CATCo Investment Man- 100% Bermuda Primarily engaged in providing investment manage- Company (“KQIC”) through QICI) agement Ltd. ment services. Qatar Reinsurance 55.38% (2013: State of Qatar Primarily engaged in reinsurance. Qatar-Re manages CATCo-Re Ltd. 100% Bermuda Primarily engaged in issuance of fully collateralized re- Company L.L.C. 55.64%) directly the reinsurance operations of the Group and has insurance contracts for CATCo Re Fund. (Previously known as and 40% (2013: a branch office in Switzerland, Bermuda and a Epicure Managers Qatar 100% BVI Primarily engaged in providing investment manage- Q-Re LLC) 39.74%) owned representative office in United Kingdom Ltd. ment services through QICI QIC International 84.6% State of Qatar The subsidiary is incorporated under the Ministry of Q Life & Medical 85% State of Qatar Primarily engaged in life and medical insurance Trade and Business regime and is inoperative at the Insurance Co LLC business moment Antares Holdings 100% Bermuda Incorporated as a holding company for participation QIC Capital L.L.C. 100% State of Qatar Incorporated as a holding company to hold equity in- Limited ( AHL) in Antares Syndicate 1274 terest in asset management initiatives of the Group Antares Reinsurance 100% (owned Bermuda Incorporated as a Class 3 reinsurer for participation in LCP Holdings Ltd. 51% owned through Cayman Islands Primarily engaged in financial and other advisory ser- Limited ( ARL) through AHL) Antares Syndicate 1274 QIC Capital L.L.C. vices Antares Underwriting 100% (owned United Kingdom Incorporated to provide capital supporting the Taleem Advisory Ltd. 100% (2013: 51%) Cayman Islands Primarily engaged in financial and other advisory ser- Limited through ARL) underwriting capacity of Antares Syndicate 1274 owned through vice. Antares Managing 100% (owned United Kingdom Incorporated to act as a managing agent for Antares QEA Agency Limited (AMAL) through ARL) Syndicate 1274 QIC Asset Management 100% owned Cayman Islands Primarily engaged in financial and other advisory ser- Antares Capital I 100% (owned United Kingdom Incorporated to provide capital supporting the Ltd through QEA. vices Limited through ARL) underwriting capacity of Antares Syndicate 1274 Education Company 2 100% owned Cayman Islands Primarily engaged in financial and other advisory ser- Ltd through QEA. vices Antares Capital III 100% (owned United Kingdom Incorporated to provide capital supporting the Lagoon Capital Partners 100% owned UAE Primarily engaged in financial and other advisory ser- Limited through ARL) underwriting capacity of Antares Syndicate 1274 Ltd through LCP Hold- vices Antares Capital IV 100% (owned United Kingdom Incorporated to provide capital supporting the ings Ltd. Limited through ARL) underwriting capacity of Antares Syndicate 1274 Qatar Re Capital Ltd 100% owned United Kingdom Primarily engaged in financial and other advisory ser- QIC Europe Limited 100% Malta Primarily engaged in insurance business through QIC Capi- vices QANIT Ltd. 100% (owned UAE Primarily engaged in Real Estate activities in the UAE tal L.L.C. through QICI) Page 74 Page 75 Notes to the consolidated financial statements

2. Application of new and revised International Financial Reporting Standards (IFRSs) Financial assets and financial liabilities are offset and the net amount reported In the current financial year, the Group has adopted certain new and revised standards in these consolidated statement of financial position only when there is a legally and interpretations, which are mainly: enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liability simultaneously. IFRS 10, 12, IAS 27(Revised) Certain amendments to introduce an exception from the Income and expense are not offset in the consolidated statement of income unless requirement to consolidate subsidiaries for an investment entity. required or permitted by any accounting standard or interpretation, as specifically IAS 36 Certain amendments arising from recoverable amount disclosures for non- disclosed in the accounting policies of the Group. financial assets c) Functional and presentation currency The revised standards issued by IASB and IFRIC interpretations which are effective from These consolidated financial statements are presented in Qatari Riyal (QR) and the accounting period commencing January 1, 2014, had no significant effect on the rounded to the nearest thousand (QR ‘000), unless otherwise indicated. consolidated financial statements of the Group for the year ended December 31, 2014. d) Significant accounting judgements and estimates The following IASB Standards and IFRIC interpretations issued but, are not mandatory The Group makes judgements, estimates and assumptions that affect the reported for the year ended December 31, 2014, have not yet been adopted by the Group: amounts of assets, liabilities, revenues, expenses and disclosure of contingent liabilities at the reporting date. Estimates and judgements are continually evaluated • IFRS 9 - “Financial Instruments” was issued to replace IAS 39 – “Financial Instruments: and are based on historical experience and other factors, including expectation of Recognition and Measurement”. IFRS 9 simplifies the mixed measurement model future events that are believed to be reasonable under the circumstances. and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity’s business Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions model and the contractual cash flow characteristics of the financial asset. IFRS 9 to accounting estimates are recognised in the year in which the estimates are revised Financial Instruments will be applicable for annual periods beginning on or after and in any future years affected. The key judgements and estimates made by the January 1, 2018; Group is detailed in Note 31. • Certain consequential amendments to IFRS 7 “Financial Instrument disclosures” 4. SIGNIFICANT ACCOUNTING POLICIES and IAS 39 (Revised) due to application of IFRS 9, detailed above. a) Consolidation, translation and financial instruments The Group is currently in the process of evaluating the potential effect of these I) Basis of consolidation amendments in the presentation of the consolidated financial statements. Subsidiaries A number of new standards, amendments to standards and interpretations that are not The consolidated financial statements incorporate the financial statements of yet effective for the year ended December 31, 2014 have not been applied in preparing the Parent Company and entities controlled by the Parent Company directly or these consolidated financial statements. The Group does not expect the proposed indirectly as at December 31st of each year. amendments which will become mandatory for the consolidated financial statements Subsidiaries are all entities over which the Group has control. Subsidiaries are for the year 2015 or thereafter, to have a significant impact on the consolidated financial fully consolidated from the date of acquisition, being the date on which the statements. Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiary companies are 3. BASIS OF PREPARATION prepared for the same reporting period as the Parent Company, using consis- a) Statement of compliance tent accounting policies. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Control is achieved when the Parent Company directly or indirectly (i) has pow- Accounting Standards Board (IASB) and the applicable requirements of the Qatar er over the investee, (ii) has exposure or rights to variable returns from its in- Commercial Companies Law No. 5 of 2002. volvement with the investee and (iii) has the ability to use its power to effect those returns. b) Basis of preparation The accompanying consolidated financial statements have been prepared under the historical cost convention, except for certain financial instruments that are measured at fair value at the end of each reporting period . Page 76 Page 77 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) Joint ventures are joint arrangement whereby the parties that have joint control a) Consolidation, translation and financial instruments (Continued) of the arrangement have rights to the net assets of the joint arrangement. Joint I) Basis of consolidation (Continued) control is the contractually agreed sharing of control of an arrangement, which The Parent Company reassesses whether or not it controls an investee and exists only when decisions about the relevant activities require unanimous facts and circumstances indicate that there are changes to one or more of the consent of the parties sharing control. three elements of control listed above. Investments in associates and jointly controlled entities are accounted for using Profit or loss and each component of other comprehensive income are attributed the equity method. to the owners of the Parent Company and to the non-controlling interests. Total Under the equity method, the investment is initially recognised in the comprehensive income of subsidiaries is attributed to the owners of the Parent consolidated statement of financial position at cost and adjusted thereafter to Company and to the non-controlling interests even if this results in the non- recognize the Group’s share of profit or loss and other comprehensive income controlling interests having a deficit balance. of the associate or joint venture. When the Group’s share of losses exceeds its All significant intragroup assets and liabilities, equity, income, expenses interest in an equity-accounted investee, the carrying amount of that interest, and cash flows relating to transactions between members of the Group are including any long-term investments, is reduced to zero, and the recognition eliminated in full on consolidation. of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as The consolidated financial statements include the Group’s share of profit or loss equity transactions. The carrying amounts of the Group’s interests and the and other comprehensive income, after adjustments to align the accounting non-controlling interests are adjusted to reflect the changes in their relative policies with those of the Group, from the date that significant influence or interests in the subsidiaries. Any difference between the amount by which the joint control commences until the date that significant influence or joint control non-controlling interests are adjusted and the fair value of the consideration ceases. The financial year–end of the associate entities and the Group is uniform. paid or received is recognised directly in equity and attributed to owners of Business combination the Parent Company. Acquisitions of businesses are accounted for using the acquisition method. Non-controlling interests represent the portion of profit or loss and net assets The consideration transferred in a business combination is measured at fair not held by the Group and are presented separately in the consolidated value, which is calculated as the sum of the acquisition-date fair values of statement of income and within equity in the consolidated statement of the assets transferred by the Group, liabilities incurred by the Group to the financial position, separately from parent shareholders’ equity. former owners of the acquiree and the equity interests issued by the Group in When the Group ceases to control, any retained interest in the entity is re- exchange for control of the acquiree. Acquisition-related costs are recognized measured to its fair value at the date when control is lost, with the change in in consolidated statement of income as incurred. carrying amount recognised in the consolidated statement of income. The fair At the acquisition date, the identifiable assets acquired and the liabilities value is the initial carrying amount for the purposes of subsequently accounting assumed are recognized at their fair value. for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income Goodwill is measured as the excess of the sum of the consideration transferred, in respect of that entity are accounted for as if the Group had directly disposed the amount of any non-controlling interests in the acquiree, and the fair value of the related assets or liabilities. This may mean that amounts previously of the acquirer’s previously held in equity interest in the acquiree (if any) over recognised in other comprehensive income are reclassified to the consolidated the net of the acquisition-date amounts of the identifiable assets acquired and statement of income. liabilities assumed as at date of acquisition. If the net of the acquisition date amounts of identifiable asset acquired and liabilities assumed exceeds the sum II) Investments in associates and jointly controlled entities of the consideration transferred, the amount of any non-controlling interests in Associates are those entities in which the Group has significant influence, but the acquiree (if any), the excess is recognized immediately in the consolidated not control, over the financial and operating policies. Significant influence is statement of income as a bargain purchase gain. the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

Page 78 Page 79 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) Gains or losses arising from derecognition of an intangible asset are measured a) Consolidation, translation and financial instruments (Continued) as the difference between the net disposal proceeds and the carrying amount II) Investments in associates and jointly controlled entities (Continued) of the asset and are recognised in the consolidated statement of income when Goodwill the asset is derecognised. Goodwill arising on an acquisition of a business is carried at cost as established The current policy applied to the Group’s intangible assets is as follows: at the date of acquisition of the business less accumulated impairment losses, if any. Intangible assets acquired Economic Life For the purposes of impairment testing, goodwill is allocated to each of the Syndicate Capacity Indefinite Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. Runoff services – Württembergische Versicherung AG 7 years A cash-generating unit to which goodwill has been allocated is tested for III) Foreign currency impairment at least annually, or more frequently when there is an indication Foreign operations that the unit may be impaired. If the recoverable amount of the cash-generating The individual financial statements of the Group entities are presented in the unit is less than its carrying amount, the impairment loss is allocated first to currency of the primary economic environment in which they operate (functional reduce the carrying amount of any goodwill allocated to the unit and then to currency). For the purpose of these consolidated financial statements, the the other assets of the unit pro rata based on the carrying amount of each results and financial position of each subsidiary are expressed in the functional asset in the unit. Any impairment loss for goodwill is recognised directly in the currency of the Parent Company. consolidated statement of income. An impairment loss recognised for goodwill The assets and liabilities of foreign operations are translated to Qatari Riyal is not reversed in subsequent periods using exchange rates prevailing at the reporting date. Income and expenses are On disposal of the relevant cash-generating unit, the attributable amount of also translated to Qatari Riyal at the exchange rates prevailing at the reporting goodwill is included in the determination of the profit or loss on disposal. date, which do not significantly vary from the average exchange rates for the year. Foreign currency translation reserve is not shown separately under equity Intangible assets due to insignificance of the amount. Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at cost which is their fair value as at the Any goodwill arising on the acquisition of a foreign operation and any fair value date of acquisition. Subsequent to initial recognition, adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and • Intangible assets with finite lives are amortised over the useful economic life translated at the rate of exchange prevailing at the end of each reporting and assessed for impairment whenever there is an indication that the intangible period. Exchange differences are recognized in other comprehensive income. asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each Foreign currency transactions financial year end. Changes in the expected useful life or the expected pattern of Foreign currency transactions are recorded in the respective functional consumption of future economic benefits embodied in the asset are accounted currencies of Group entities at the rates of exchange prevailing at the date for by changing the amortisation period or method, as appropriate, and are of each transaction. Monetary assets and liabilities denominated in foreign treated as changes in accounting estimates. The amortisation expense on currencies at the reporting date are translated to the respective functional intangible assets with finite lives is recognised in the consolidated statement of currencies at the rate of exchange prevailing at the year end. The resultant income. exchange differences are included in the consolidated statement of income. • Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on prospective basis. Page 80 Page 81 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) Changes in the fair value of derivative financial instruments that do not qualify a) Consolidation, translation and financial instruments (Continued) for hedge accounting are recognized in the profit or loss as they arise. IV) Financial instruments Fair values of marketable investments are determined by reference to their bid Financial instruments represent the Group’s financial assets and liabilities. prices at the close of business at the reporting date. In respect of unquoted Financial assets include cash and cash equivalents, insurance and other available for sale financial assets, the fair value is determined based on various receivables and investments. Financial liabilities include short term borrowings valuation techniques, as deemed appropriate. The fair values of the Group’s and other payables. other financial assets and financial liabilities are not materially different from Financial asset or liability is initially measured at fair value. Transaction costs their carrying values. that are directly attributable to the acquisition or issue of financial assets and Impairment of financial asset liabilities (other than financial assets and financial liabilities at fair value through At each reporting date, the Group assesses whether there is objective evidence profit or loss) are added to or deducted from the fair value of the financial that any financial asset is impaired. Financial assets are impaired when assets or financial liabilities, as appropriate, on initial recognition. Transaction objective evidence demonstrates that a loss event has occurred after the initial costs directly attributable to the acquisition of financial assets or financial recognition of the asset, and that the loss event has an impact on the future liabilities at fair value through profit or loss are recognised immediately in the cash flows of the asset that can be estimated reliably. consolidated statement of income. Objective evidence that financial assets are impaired can include default Recognition or delinquency by a customer or insurer or reinsurer, indications that the The Group initially recognizes cash and cash equivalents, insurance and other customer or insurer or reinsurer will enter bankruptcy or the disappearance receivables, short term borrowings and other payables at the date that they of an active market for a security. In addition for an investment in equity originate. All other financial assets and liabilities are initially recognized at security, a significant or prolonged decline in its fair value below its cost is the trade date or settlement date when the Group becomes a party to the objective evidence of impairment. Impairment loss on assets are recognised contractual provisions of the instrument. in the consolidated statement of income and reflected as an allowance against receivables or investments. De-recognition The Group derecognizes a financial asset when the contractual rights to b) Insurance operations receive cash flows from that asset expire or it transfers the right to receive the I) Insurance and other receivables contractual cash flow of that asset in a transaction in which substantially all Insurance and other receivables are recognised when due and measured on the risks and rewards of ownership of the financial assets are transferred. Any initial recognition at the fair value of the consideration received or receivable. The interest in the transferred financial assets that is created or retained by the carrying value of the receivables is reviewed for impairment whenever events Group is recognised as a separate asset or liability. The Group derecognizes a or circumstances indicate that the carrying amount may not be recoverable, financial liability when its contractual obligations are discharged or cancelled with the impairment loss recorded in the consolidated statement of income. or expired. After initial measurement, insurance and other receivables are measured at amortised cost as deemed appropriate. Measurement Insurance receivables are derecognised when the derecognition criteria for The measurement of financial assets and liabilities is disclosed under accounting financial assets, as described in note 4 (iii), have been met. policy for respective financial assets and liabilities. Fair values of financial instruments II) Reinsurance contract assets Fair value is the amount for which an asset could be exchanged or a liability The Group cedes insurance risk in the normal course of business as part of settled between knowledgeable willing parties on an arm’s length transaction its businesses model. Reinsurance assets represent balances recoverable from at the measurement date. Differences can therefore arise between the book reinsurance companies. Amounts recoverable from reinsurers are estimated in values under the historical cost method and fair value estimates. a manner consistent with the outstanding claims provision or settled claims associated with the reinsurers’ policies and are in accordance with the related Underlying the definition of fair value is a presumption that an enterprise is a reinsurance contract. going concern without any intention or need to liquidate, curtail materially the scale of its operations or undertake a transaction on adverse terms. Page 82 Page 83 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) risks that have not yet expired at the reporting date. The provision is recognised b) Insurance operations (Continued) when contracts are entered into and premiums are charged, and is brought to III) Reinsurance and other payables account as premium income over the term of the contract in accordance with Reinsurance and other payables are recognized when due and measured on the pattern of insurance service provided under the contract. initial recognition at the fair value of the consideration received less directly Insurance contract liabilities are derecognised when the contract expires, attributable transaction costs. Subsequently, reinsurance and other payables discharged or cancelled by any party to the insurance contract. are measured at amortised cost, as deemed appropriate. VII) Gross claims paid IV) Gross premiums Gross claims paid include all claims paid during the year and the related external Gross premiums are recognized when written and include an estimate for claims handling costs that are directly related to the processing and settlement written premiums receivable at period end. Gross premiums comprise the of claims. total premiums receivable for the whole period of cover provided by contracts entered into during the accounting period. Gross premiums also include any VIII) Commission earned and paid adjustments arising in the accounting period for premiums receivable in respect Commissions earned and paid are recognized at the time the policies are of business written in prior accounting periods. Premium on insurance contracts underwritten or deferred and amortised over the same period over which the are recognized as revenue (earned premiums) proportionally over the period of corresponding premiums are recognised in accordance with the pattern of coverage. The portion of premium received on in-force contracts that relates to insurance service provided under the contract. unexpired risks at the reporting date is reported as unearned premium reserve. IX) Investment activities V) Premiums ceded to reinsurers The Group classifies its investments into financial assets at fair value through Reinsurance premiums comprise the total premiums payable for the reinsurance profit or loss and available for sale financial assets. The classification depends cover provided by contracts entered into during the period and are recognized on the purpose for which the investments were acquired or originated. on the date on which the policy incepts. Reinsurance premiums also include any C. adjustments arising in the accounting period in respect of reinsurance contracts incepting in prior accounting periods. Unearned reinsurance premiums are I) Non-derivative financial instruments those proportions of premiums written in a year that relate to periods of risk All investments are initially recognised at cost, being the fair value of the after the reporting date. consideration given including acquisition charges associated with the investment. VI) Insurance contract liabilities Insurance contract liabilities include the outstanding claims provision and the Financial assets at fair value through profit or loss (Held for trading) provision for unearned premium Insurance contract liabilities are recognised Financial assets at fair value through profit or loss include financial assets held when contracts are entered into and premiums are charged. for trading and those designated upon initial recognition at fair value through profit or loss. Investments typically bought with the intention to sell in the near Provision for outstanding claims future are classified as held for trading. These investments are carried at fair Provision for outstanding claims is recognized at the date the claims are known value (marked to market) with any gain or loss arising from the change in fair and covers the liability for loss and loss adjustment expenses based on loss value included in the profit or loss in the year in which it arises. reports from independent loss adjusters and management’s best estimate. Available for sale – Quoted Claims provision also includes liability for claims incurred but not reported as Subsequent to initial recognition, investments which are classified “available for at the reporting date. The liability is calculated at the reporting date using a sale - quoted” are re-measured at fair value. The unrealised gains and losses on range of historic trends, empirical data and standard actuarial claim projection re-measurement to fair value are recognized in other comprehensive income techniques. The current assumptions may include a margin for adverse and accumulated under the heading of fair value reserve until the investment deviations. The liability is not discounted for the time value of money. is sold, collected or otherwise disposed of, or the investment is determined to Unexpired risks reserve be impaired, at which time the cumulative gain or loss previously reported in The provision for unearned premiums represents that portion of premiums equity is included in the consolidated statement of income for the year. received or receivable, after deduction of the reinsurance share, which relates to

Page 84 Page 85 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) VI) Rental income c) (Continued) Rental income from investment properties is recognised in consolidated I) Non-derivative financial instruments (Continued) statement of income on a straight line basis over the term of operating lease Available for sale – Unquoted shares and private equity and the advances and unearned portion of the rental income is recognised as The fair value of these investments cannot be reliably measured due to the a liability. nature of their cash flows, these investments are therefore carried at cost less d) General any provision for impairment. I) Cash and cash equivalents II) Derivative financial instruments Cash and cash equivalents comprise cash at bank and in hand and short-term Derivatives are initially recognized at cost, being fair value of the consideration deposits with an original maturity of three months or less in the consolidated given or received on the date of acquisition and are subsequently remeasured statement of financial position. The cash equivalents are readily convertible to at their fair value. cash. The fair value of a derivative is the equivalent of the unrealised gain or loss II) Short term borrowings from marking to market the derivative using prevailing market rates or internal Short term borrowings are recognised initially at fair value, net of transaction pricing models. costs incurred and it is subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is The resultant gains and losses on derivatives held for trading purposes are recognized in the consolidated statement of income over the period of the included in the consolidated statement of income. borrowings using the effective interest method. Changes in the fair value of derivatives that are designated and qualify as fair III) Investment properties value hedges are recognised in profit or loss immediately, together with any Investment properties are properties held to earn rentals and/or for capital changes in the fair value of the hedged asset or liability that are attributable to appreciation. Investment properties are measured initially at cost, including the hedged risk transaction costs. Subsequent to initial recognition, investment properties III) Fair value reserve are carried at historical cost less accumulated depreciation and accumulated This represents the unrealised gain or loss of the year-end fair valuation of impairment losses. available for sale investments. In the event of a sale or impairment, the Investment properties are derecognised when either they have been disposed- cumulative gains or losses recognised under the investments fair value reserve off or when the investment property is permanently withdrawn from use and are included in the consolidated statement of income for the year. no future economic benefit is expected from its disposal. Any gains or losses IV) Investment income on the retirement or disposal of an investment property are recognised in the Interest income consolidated statement of income in the year of retirement or disposal. Interest income is recognised in the income statement as it accrues and is IV) Property and equipment calculated by using the effective interest rate method, except for short-term Property and equipment, including owner-occupied properties, are carried at receivables when the effect of discounting is immaterial. historical cost less accumulated depreciation and accumulated impairment Dividend income losses. Subsequent expenditure is capitalised only when it is probable that Dividend income is recognised when the right to receive the dividends is future economic benefits associated with the expenditure will flow to the Group. established or when received. Ongoing repairs and maintenance are charged to the consolidated statement of income during the financial period they are incurred. V) Advisory fee income Initial and other front-end fees received for rendering financial and other The assets’ residual values, useful lives and method of depreciation applied are advisory services are deferred and recognised as revenue when the related reviewed and adjusted, if appropriate, at each financial year end and adjusted services are rendered. prospectively, if appropriate. Impairment reviews are performed when there are indicators that the carrying value may not be recoverable. Impairment losses are recognised in the consolidated statement of income as an expense.

Page 86 Page 87 Notes to the consolidated financial statements

4. SIGNIFICANT ACCOUNTING POLICIES (Continued) that can be estimated reliably, and it is probable that an outflow of economic d) General (Continued) benefits will be required to settle the obligation. The provision is created by IV) Property and equipment (Continued) charging the consolidated statement of income for any obligations as per the An item of property and equipment is derecognised upon disposal or when no calculated value of these obligations and the expectation of their realisation at future economic benefits are expected from its use or disposal. Any gain or loss the reporting date. arising on de-recognition of the asset (calculated as the difference between IX) Employees’ end of service benefits the net disposal proceeds and the carrying amount of the asset) is recognised Provision is made for amounts payable in respect of employees’ end of service in the consolidated statement of income in the year the asset is derecognised. benefits based on contractual obligations or respective local labour laws of V) Depreciation the group entities, whichever is higher, and is calculated using the employee’s Depreciation is provided on a straight line basis on all property and equipment salary and period of service at the reporting date. and investment properties, other than freehold land which is determined to IX) Contribution to social and sports fund have an indefinite life. The rates of depreciation are based upon the following Pursuant to the Qatar Law No. 13 of 2008 and the related clarifications issued estimated useful lives: in 2012, which is applicable to all Qatari listed shareholding companies with Buildings - 15 to 20 years publicly traded shares, the Group has made an appropriation of 2.5% of its Furniture & fixtures - 2 to 5 years adjusted net profit to a state social fund. Motor vehicles - 3 years X) Share capital Depreciation methods, useful lives and residual values are reviewed and The Group has issued ordinary shares that are classified as equity instruments. adjusted if appropriate at each financial year end. Incremental external costs that are directly attributable to the issue of these shares are recognised in equity. VI) Impairment of non-financial assets An assessment is made at each reporting date to determine whether there is XI) Dividend distribution objective evidence that an asset or group of assets is impaired. If such evidence Dividend distribution to the Parent Company’s shareholders is recognised as a exists, the estimated recoverable amount of that asset is determined and an liability in the Parent Company’s consolidated financial statements in the period impairment loss is recognized for the difference between the recoverable in which the dividends are approved by the Parent Company’s shareholders. amount and the carrying amount. Impairment losses are recognized in the XII) Earnings per share consolidated statement of income. The Group presents basic and diluted earnings per share (EPS) data for its The following assets have specific characteristics for impairment testing: ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Parent Company by the weighted number Goodwill of ordinary shares outstanding during the year. Diluted EPS is calculated by Goodwill is tested for impairment annually and when circumstances indicate adjusting the earnings and number of shares for the effects of all dilutive that the carrying value may be impaired. Impairment is determined for goodwill potential shares. by assessing the recoverable amount of the cash generating unit (CGU) to which the goodwill relates. When the recoverable amount of the CGU is less XIII) Segment reporting than its carrying amount, an impairment loss is recognised. Impairment losses An operating segment is a component of the Group that engages in business relating to goodwill cannot be reversed in future periods. activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other Intangible assets components. All operating segments’ operating results are reviewed regularly Intangible assets with indefinite useful lives are tested for impairment annually by the management to make decisions about resources to be allocated to at the cash generating unit level, as appropriate, and when circumstances the segment and assess its performance, and for which discrete financial indicate that the carrying value may be impaired. information is available. VII) Provisions The Group recognizes provisions in the consolidated financial statements when the Group has a legal or constructive obligation (as a result of a past event) Page 88 Page 89 Notes to the consolidated financial statements

5. BUSINESS COMBINATION Goodwill arising on acquisition Acquisition of Antares Holdings Limited and its subsidiary companies by the Group Goodwill arising on the business combination has been computed as follows: Effective January 1, 2014, the Group acquired 100% of the share capital of Antares Holdings Limited and its subsidiary companies. The regulatory close of the transactions As at January 1, was completed on 25th June 2014. Antares Holdings Limited and its subsidiaries 2014 through its participation in Antares Syndicate 1274 are providers of global insurance and (QR ‘000) reinsurance products. The Group has acquired this company as part of its strategy to expand its wider international operations and to build a significant P&C and specialty Fair value of consideration given for acquiring 1,178,164 insurance footprint. controlling interest The fair value of the identifiable assets and liabilities of Antares Holdings Limited and Fair value of business as at the date of acquisition 1,178,164 its subsidiary companies as at the date of acquisition, as per IFRS 3 were the following; Less: Net identifiable assets acquired in accordance with IFRS 3 (1,033,053)

Fair value Goodwill arising on acquisition 145,111 recognized on Net cash outflow on acquisition of subsidiary acquisitioan (QR ‘000) 2014 Assets (QR ‘000) Cash and cash equivalents 162,976 Cash consideration paid in cash 1,178,164 Insurance and other receivables 746,967 Less: Cash and cash equivalent balances acquired (162,976) Reinsurance contract assets 589,364 1,015,188 Investments 1,702,095 The following table summarizes the intangible assets recorded in connection with the acquisition: Property and equipment 3,687 Amount Economic useful Intangible assets 276,341 (QR ‘000) Life Total assets 3,481,430 Lloyd’s syndicate capacity 266,222 Indefinite Liabilities Runoff services - Württembergische 10,119 7 years Insurance contract liabilities 1,956,773 Versicherung AG Provisions, reinsurance and other payables 491,604 Intangible assets as of the acquisition date 276,341 Total liabilities 2,448,377 Amortisation expense (1,446) Net identifiable assets acquired 1,033,053 Net Intangible assets as at 274,895 December 31, 2014 (Note 13)

Page 90 Page 91 Notes to the consolidated financial statements

5. BUSINESS COMBINATION (CONTINUED) 7. INSURANCE AND OTHER RECEIVABLES Lloyd’s Syndicate Capacity 2014 2013 The fair value of Lloyd’s syndicate capacity and insurance licenses was estimated (QR ‘000) (QR ‘000) using the market approach. The Lloyd’s capacity is renewed annually at no cost to the subsidiary or may be freely purchased or sold, subject to Lloyd’s approval. The ability Receivables from policyholders to write insurance business within the syndicate capacity is indefinite with the premium income limit being set annually by the Company, subject to Lloyd’s approval. Due from policy holders 9,62,800 380,556 Runoff services - Württembergische Versicherung AG (WV) Impairment losses on doubtful receivables (9,574) (7,039) The fair value of Württembergische Versicherung AG (WV) management agreement 953,226 373,517 represents the estimated amount of the run-off administration services in respect of the former UK Branch of WV which is provided by Antares Underwriting Services Limited Receivables from Reinsurers (“AUSL”). The fair value of the agreement has been capitalised and amortised on a straight-line basis, over the estimated useful life of 7 years. Due from insurance companies 1,154,772 628,447 Transaction and Acquisition-Related Costs Impairment losses on doubtful receivables (21,417) (17,896) Transaction costs associated with the acquisition have been expensed and are included 1,133,355 610,551 in the operative and administrative expenses in the consolidated statement of income and are part of operating cash flows in the consolidated statement of cash flows. Other receivables From the date of acquisition, Antares Holdings Limited and its subsidiaries have Staff advances against indemnity 44,204 39,120 contributed the equivalent of QR 1,376,750 thousand of Gross premium written and QR Deferred acquisition cost 434,207 78,646 83,229 thousand to the net profit of the Group. Prepayments and others 255,036 62,781 6. CASH AND CASH EQUIVALENTS 733,447 180,547 2014 2013 (QR ‘000) (QR ‘000) 2,820,028 1,164,615 Cash and demand deposits 834,131 402,370 Time deposits maturing within 3 months 1,812,776 2,949,535 2,646,907 3,351,905

Time deposits amounting to QR 122,056 thousand (2013: QR 110,067 thousand) are held by banks as security against guarantees given on behalf of the Group.

Page 92 Page 93 Notes to the consolidated financial statements

8. INSURANCE CONTRACT LIABILITIES AND REINSURANCE CONTRACT ASSETS 8. INSURANCE CONTRACT LIABILITIES AND REINSURANCE CONTRACT ASSETS (CONTINUED) 2014 2013 Movements in insurance contract liabilities and reinsurance contract assets are as follows: (QR ‘000) (QR ‘000) Gross insurance contract liabilities 2014 Claims reported and unsettled 3,219,502 2,031,821 Insurance contract Reinsurers’ Claims incurred but not reported 1,467,199 571,233 liabilities share Net Unearned premiums 3,644,313 1,991,561 (QR ‘000) (QR ‘000) (QR ‘000) 8,331,014 4,594,615 At January 1, 2,603,054 1,269,167 1,333,887 Reinsurers’ share of insurance contract Claims incurred 3,819,461 1,412,781 2,406,680 liabilities Movement on acquisition 1,388,085 470,787 917,298 Claims reported and unsettled 1,413,718 1,057,036 Claims paid during the year (3,123,899) (1,323,220) (1,800,679) Claims incurred but not reported 415,797 212,131 At December 31, 4,686,701 1,829,515 2,857,186 Unearned premiums 1,421,942 882,151 3,251,457 2,151,318 2013 Net insurance contract liabilities Insurance Reinsurers’ share Net contract liabilities (QR ‘000) (QR ‘000) Claims reported and unsettled 1,805,784 974,785 Claims incurred but not reported 1,051,402 359,102 At January 1, 2,539,464 1,461,368 1,078,096 Unearned premiums 2,222,371 1,109,410 Claims incurred 1,889,814 609,548 1,280,266 5,079,557 2,443,297 Movement on acquisition ------Claims paid during the year (1,826,224) (801,749) (1,024,475) At December 31, 2,603,054 1,269,167 1,333,887

The above movements in insurance contact liabilities reflect assets and liabilities recognized for Antares Holdings Limited and its subsidiary companies on acquisition by the Group.

Page 94 Page 95 Notes to the consolidated financial statements

8. INSURANCE CONTRACT LIABILITIES AND REINSURANCE CONTRACT ASSETS 9. EQUITY ACCOUNTED INVESTMENTS (CONTINUED) 2014 2013 Movement in provision for unearned premiums during the year are as follows: (QR ‘000) (QR ‘000) 2014 Al Daman Islamic Insurance Company 69,762 64,872 Insurance con- Reinsurers’ Asteco Qatar L.L.C. 1,246 1,246 tract liabilities share Net Massoun Insurance Services L.L.C. 6,057 15,493 (QR ‘000) (QR ‘000) (QR ‘000) Al Manhal Properties -- -- At January 1, 1,991,561 882,151 1,109,410 Gulf Real Estate Managers Ltd. -- -- Premiums written in the year 5,613,767 1,273,834 4,339,933 Gulf Real Estate Holding GP Ltd -- -- Movement on acquisition 569,949 118,577 451,372 77,065 81,611 Premiums earned during the year (4,530,964) (852,620) (3,678,344) Details of the equity accounted companies held during the year were as follows.

At December 31, 3,644,313 1,421,942 2,222,371 Place of Proportion of incorporation ownership and 2013 Name of associate and operation voting power held Principal activities Insurance con- Reinsurers’ Al Daman Islamic State of Qatar 12.5% directly and Insurance and tract liabilities share Net Insurance Company 12.5% through QICI reinsurance (QR ‘000) (QR ‘000) (QR ‘000) Asteco Qatar L.L.C. State of Qatar 20% directly Real estate brokerage At January 1, 1,101,522 488,910 612,612 and management Premiums written in the year 3,531,707 1,060,824 2,470,883 Massoun Insurance State of Qatar 50% directly Insurance marketing Movement on acquisition ------Services L.L.C. and distribution Premiums earned during the Al Manhal State of Qatar 25.5 % directly SPV for holding real year (2,641,668) (667,583) (1,974,085) Properties estate properties for a fund At December 31, 1,991,561 882,151 1,109,410 Gulf Real Estate Cayman 50 % through QIC SPV to invest and The above movements in provision for unearned premium liabilities reflect unearned Managers Ltd. Islands Capital L.L.C. manage property premium reserves and relevant Reinsurers’ share of Antares Holdings Limited and its fund and is currently subsidiary companies on acquisition by the Group. dormant. Gulf Real Estate Cayman 50 % through QIC SPV to invest and Holding GP Ltd Islands Capital L.L.C. manage property fund and is currently dormant.

Page 96 Page 97 Notes to the consolidated financial statements

10. INVESTMENTS 9. EQUITY ACCOUNTED INVESTMENTS (CONTINUED) The carrying amounts of investments at yearend were as follows: Summarised financial information of the equity accounted companies are as follows: 2014 2013 2014 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Held for trading investments Current assets 706,057 671,253 Managed funds and Shares 1,528,922 210,912 Non-current assets 3,097 3,067 Current liability 443,352 377,293 Available-for-sale investments Non-current liability -- 86 Qatari public shareholding Results for the year 44,973 37,183 Companies 1,898,111 1,775,205 Bonds 4,212,156 3,193,524 Balance at January 1, 81,611 70,403 Less : Margin Collaterals (2,247,536) 1,964,620 (1,627,373) 1,566,151 Capital reduction (7,500) -- Dividends (9,710) -- International quoted shares 659,401 527,362 Share of profit for the year 12,664 11,208 Unquoted shares and private equity 421,053 383,385 Balance at December 31, 77,065 81,611 Total available for sale investments 4,943,185 4,252,103 Total investments 6,472,107 4,463,015 Less: Impairment loss recognised (4,025) (745) Total investments 6,468,082 4,462,270

Page 98 Page 99 Notes to the consolidated financial statements

11. INVESTMENT PROPERTIES 12. PROPERTY AND EQUIPMENT 2014 2013 Freehold Furniture Motor (QR ‘000) (QR ‘000) land Building & fixtures vehicles Total (QR ’000) (QR ’000) (QR ’000) (QR ’000) (QR ’000) Net carrying value as at January 1, 387,197 438,636 Cost: Additions during the year 668 1,332 At January 1, 2013 9,709 40,352 59,546 9,717 119,324 Disposals during the year -- (39,826) Additions -- -- 15,065 1,468 16,533 Depreciation for the year (12,795) (12,945) Disposals -- -- (6,576) (1,021) (7,597) At December 31, 2013 9,709 40,352 68,035 10,164 128,260 Net carrying value as at December 31, 375,070 387,197 Acquired through business combination (Note 5) -- -- 7,138 -- 7,138 Investment property Additions -- -- 10,853 3,872 14,725 At cost 465,012 464,344 Effect of foreign currency exchange difference -- -- (504) -- (504) Accumulated depreciation (89,942) (77,147) Disposals -- (642) (781) (1,423) Net carrying value as at December 31, 375,070 387,197 At December 31, 2014 9,709 40,352 84,880 13,255 148,196 The investment properties were revalued by an independent valuer not connected with the Group, by reference to market evidence of recent transactions for similar properties. The estimated fair value of the above investment properties as at December 31, 2014 Accumulated Depreciation: were QR 1,090.3 million (2013: QR 1,055.3 million). -- 37,454 42,316 7,664 87,434 The rental income arising during the year amounted to QR 49,847 thousand (2013: At January 1, 2013 QR 47,113 thousand) and the direct operating expenses (included within general and Charge during the year -- 1,147 7,827 1,481 10,455 administrative expenses) arising in respect of such properties during the period was QR Disposals -- -- (2,265) (956) (3,221) 5,648 thousand (2013: QR 5,689 thousand). At December 31, 2013 -- 38,601 47,878 8,189 94,668 Acquired through business combination (Note 5) -- -- 3,451 -- 3,451 Charge during the year -- 1,147 10,088 1,848 13,083 Effect of foreign currency exchange difference -- -- (248) -- (248) Disposals -- -- (642) (781) (1,423) At December 31, 2014 -- 39,748 60,527 9,256 109,531

Net book values: At December 31, 2014 9,709 604 24,353 3,999 38,665 At December 31, 2013 9,709 1,751 20,157 1,975 33,592

Page 100 Page 101 Notes to the consolidated financial statements

13. INTANGIBLE ASSETS 15.1 EMPLOYEES’ END OF SERVICE BENEFITS 2014 2013 2014 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Cost: Provision at January 1, 68,983 62,347 Acquisition of Antares Holdings Limited Expenses recognised during the year 12,002 9,205 (Note 5) 276,341 -- Payment made during the year (1,296) (2,569) At December 31, 276,341 -- Provision at December 31, 79,689 68,983 Accumulated impairment: 16. SHARE CAPITAL Amortisation for the year 1,446 -- The authorised, issued and fully paid share capital at December 31, 2014 consists of At December 31, 1,446 -- 160,540,380 equity shares of QR 10 each (2013: 128,432,304 equity shares of QR 10 each). Carrying amount: 17. LEGAL RESERVE At December 31, 274,895 -- Legal reserve is computed in accordance with the provisions of the Qatar Central Bank (QCB) regulations, Qatar Commercial Companies’ Law No.5 of 2002 and the company’s 14. SHORT TERM BORROWINGS Articles of Association at 10% of the net profit for the year. On November 23, 2014, the 2014 2013 Extra-Ordinary General Meeting approved the amendment of paragraph (1) Article (66) (QR ‘000) (QR ‘000) of the Articles of Association of the Company. This reserve is to be maintained until it equates 100% of the paid up capital and is not available for distribution except in Short term borrowings 182,000 746,200 circumstances specified in the Qatar Central Bank (QCB) regulations/Qatar Commercial Companies Law No.5 of 2002. The legal reserve also includes the Group’s share in legal 15. PROVISIONS, REINSURANCE AND OTHER PAYABLES reserve arising out of the subsidiary companies. 2014 2013 (QR ‘000) (QR ‘000) 18. GENERAL RESERVE During the year no amount has been transferred to the general reserve. Trade payables 552,701 174,508 Due to reinsurance companies 641,508 424,906 19. FAIR VALUE RESERVE The fair value reserve arose from the revaluation of available for sale investments as per Other payables: the accounting policy detailed in note 4. Accruals & Deferred income 267,774 141,238 20. CATASTROPHE SPECIAL RESERVE Employees’ end of service benefits The Group has appropriated further QR 37.65 million (2013: QR 30.52 million) from its (see note 15.1) 79,689 68,983 retained earnings as a catastrophe special reserve in the consolidated statement of Provision for board of directors changes in equity. The formation of reserve was approved at the Board meeting held remuneration 22,500 22,500 on January 25, 2011. This reserve will be utilised at the recommendation of the Board of Directors after approval at the Annual General Meeting when there is a catastrophe Other liabilities 96,587 77,870 event. 1,660,759 910,005

Page 102 Page 103 Notes to the consolidated financial statements

21. OPERATING SEGMENTS a) Segment information For management purposes, the Group is organised into six business segments- Marine & Aviation insurance, Property & Casualty insurance, Health & Life insurance, Real Estate, Advisory and Investments. These segments are the basis on which the Group reports its operating segment information. Segment income statement for the year ended December 31, 2014 Segment income statement for the year ended December 31, 2013

Un-allocated Un-allocated Marine & Property & Health & Total (expenses)/ Marine & Property & Health & Total (expenses)/ Aviation Casualty Life Insurance Real Estate Advisory Investments income Total Aviation Casualty Life Insurance Real Estate Advisory Investments income Total (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Gross premiums 925,375 3,987,795 700,597 5,613,767 ------5,613,767 Gross premiums 320,039 2,545,008 666,660 3,531,707 ------3,531,707 Premiums ceded to Premiums ceded to reinsurers (267,954) (981,538) (24,342) (1,273,834) ------(1,273,834) reinsurers (149,295) (883,786) (27,743) (1,060,824) ------(1,060,824) Net premiums 657,421 3,006,257 676,255 4,339,933 ------4,339,933 Net premiums 170,744 1,661,222 638,917 2,470,883 ------2,470,883 Movement in unexpired Movement in unexpired risk reserve (48,525) (574,238) (38,826) (661,589) ------(661,589) risk reserve (22,038) (419,028) (55,732) (496,798) ------(496,798) Net earned premiums 608,896 2,432,019 637,429 3,678,344 ------3,678,344 Net earned premiums 148,706 1,242,194 583,185 1,974,085 ------1,974,085 Gross claims paid (464,422) (2,016,716) (642,761) (3,123,899) ------(3,123,899) Gross claims paid (241,080) (963,474) (621,670) (1,826,224) ------(1,826,224) Reinsurance recoveries 161,779 972,754 188,687 1,323,220 ------1,323,220 Reinsurance recoveries 138,647 480,763 182,339 801,749 ------801,749 Movement in outstanding Movement in outstanding claims (29,060) (524,296) (52,645) (606,001) ------(606,001) claims 11,863 (247,554) (20,100) (255,791) ------(255,791) Net commission (132,529) (427,615) (59,949) (620,093) ------(620,093) Net commission (9,156) (141,090) (61,055) (211,301) ------(211,301) Other insurance income Other insurance income (Unallocated) ------12,277 12,277 (Unallocated) ------2,231 ------2,231 Net underwriting result 144,664 436,146 70,761 663,848 ------663,848 Net underwriting result 48,980 370,839 62,699 484,749 ------484,749 Investment income and Investment income and other income ------848,877 -- 848,877 other income ------583,078 -- 583,078 Rental income -- 49,847 ------49,847 Rental income -- 47,113 ------47,113 Advisory fee income -- -- 116,100 -- -- 116,100 Advisory fee income -- -- 75,992 -- -- 75,992 Total income 663,848 49,847 116,100 848,877 -- 1,678,672 Total income 484,749 47,113 75,992 583,078 -- 1,190,932 Operating and Operating and administrative expenses -- (5,648) (61,192) -- (571,762) (638,602) administrative expenses -- (5,689) (56,681) -- (338,013) (400,383) Depreciation -- (12,795) (37) -- (14,492) (27,324) Depreciation -- (14,287) (103) -- (9,010) (23,400) Profit before share of Profit before share of results from equity results from equity accounted investments 663,848 31,404 54,871 848,877 (586,254) 1,012,746 accounted investments 484,749 27,137 19,208 583,078 (347,023) 767,149 Share of profit from equity Share of profit from equity accounted investments ------12,664 12,664 accounted investments ------11,208 11,208 Segment results 663,848 31,404 54,871 848,877 (573,590) 1,025,410 Segment results 484,749 27,137 19,208 583,078 (335,815) 778,357 Page 104 Page 105 Notes to the consolidated financial statements

21. OPERATING SEGMENTS (CONTINUED) Segment assets, liabilities and equity as at yearend Segment statement of financial position Assets and liabilities of the Group are commonly used across the primary segments. Assets Liabilities & Equity b) Geographic Information 2014 2013 2014 2013 The Group operates in two geographic markets; the domestic market in Qatar and the (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) international markets. The following table shows the distribution of the Group’s total Qatar 7,251,159 7,430,319 8,735,131 8,008,225 assets and liabilities by geographical segment: International 8,846,121 4,202,189 7,362,149 3,624,283 Insurance business segment income statement for the year 16,097,280 11,632,508 16,097,280 11,632,508 2014 2013

Qatar International Total Qatar International Total 22. INVESTMENT INCOME (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) 2014 2013 Gross premium 1,355,613 4,258,154 5,613,767 1,320,214 2,211,493 3,531,707 (QR ‘000) (QR ‘000) Reinsurers’ share of Gain on sale of investments 540,852 282,186 gross premiums (586,525) (687,309) (1,273,834) (794,917) (265,907) (1,060,824) Interest income 189,489 145,243 Dividends 110,411 104,787 Net premiums 769,088 3,570,845 4,339,933 525,297 1,945,586 2,470,883 Unrealised (loss)/gain on investments (54,929) 13,765 Change in unexpired Others 63,712 37,119 risk reserve (42,185) (619,404) (661,589) (17,627) (479,171) (496,798) Less: Impairment losses (3,280) (745) Net earned premiums 726,903 2,951,441 3,678,344 507,670 1,466,415 1,974,085 846,255 582,355

Gross claims paid (940,546) (2,183,353) (3,123,899) (682,351) (1,143,873) (1,826,224) 23. OPERATING AND ADMINISTRATIVE EXPENSES

Reinsurance recoveries 501,164 822,056 1,323,220 416,666 385,083 801,749 2014 2013 (QR ‘000) (QR ‘000) Movement in outstanding claims (39,553) (566,448) (606,001) 1,816 (257,607) (255,791) Employee related costs 306,624 203,817 Net commission (17,780) (602,313) (620,093) 543 (211,844) (211,301) Other operating expenses 309,478 174,066 Other insurance income 1,163 11,114 12,277 1,001 1,230 2,231 Board of director’s remuneration 22,500 22,500 Net underwriting 638,602 400,383 results 231,351 432,497 663,848 245,345 239,404 484,749

Page 106 Page 107 Notes to the consolidated financial statements

24. BASIC AND DILUTED EARNINGS PER SHARE Operating leases The basic and diluted earnings per share are the same as there are no dilutive effects on Future minimum lease rentals payables under non-cancellable operating leases as at the earnings. year-end are as follows: 2014 2013 2014 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Profit attributable to owners of the parent 1,001,833 752,935 Within one year 6,619 7,173 Weighted average number of ordinary 160,540 160,540 After one year but not more than five years 26,477 28,693 shares More than 5 years 6,068 13,749 Basic and diluted earnings per share (QR.) 6.24 4.69 39,164 49,615 The Group has restated the calculations of the comparative earnings per share as a result of the effect of bonus issue of 25% (1 for every 4 shares). The bonus issue were 27. DERIVATIVE FINANCIAL INSTRUMENTS approved on the Annual General Meeting held on February 16, 2014. In the ordinary course of business, the Group enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial 25. DIVIDEND AND BONUS SHARES contract between two parties where payments are dependent upon movements in price in one or more underlying financial instrument, reference rate or index. Derivative 2014 2013 financial instruments include FX options and exchange traded options. Final cash dividend (QAR ‘000) 401,351 321,081 The table below shows the notional amounts analysed by the term to maturity. The Average number of ordinary shares notional amount is the amount of a derivative’s underlying asset, reference rate or (in thousand) 160,540 128,432 index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at yearend and are Cash dividend per share (QR.) 2.50 2.50 neither indicative of the market risk nor credit risk. The Board of Directors proposed a final cash dividend distribution of Notional Within 3 3 to 12 QR 2.50 per share (2013: Dividend of QR 2.50 per share) and bonus amount Fair value months months share of 15% (3 shares for every 20 shares) (2013: 1 share for every December 31, 2014 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) 4 shares). The proposed financial cash dividend amounting to QR 401,351 thousand (2013: 321,081 thousand) and the proposed bonus issue will be placed for approval at Exchange-traded options: the Annual General Meeting. Equity put options sold ------

26. CONTINGENT LIABILITIES AND COMMITMENTS FX options: FX put options sold ------2014 2013 (QR ‘000) (QR ‘000) FX put options bought ------Bank guarantees 940,746 41,753 FX call options sold ------Authorised future investment commitments 66,847 81,803 1,007,593 123,556

Page 108 Page 109 Notes to the consolidated financial statements

27. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) 29. RELATED PARTIES a) Transactions with related parties Notional Within 3 3 to 12 These represent transactions with related parties, i.e. Parties are considered to be amount Fair value months months related if one party has the ability to control the other party or exercise significant December 31, 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) influence over the other party in making financial and operating decisions and also, directors of the Group and companies of which they are key management Exchange-traded options: personnel. Pricing policies and terms of these transactions are approved by Equity put options sold 795 239 239 556 the Group’s management and are negotiated under normal commercial terms. Significant transactions were: FX options:

FX put options sold 29,803 88 29,803 -- 2014 2013 FX put options bought ------(QR ‘000) (QR ‘000) FX call options sold 20,703 202 20,703 -- Premiums 22,017 19,026 Various option strategies are employed for hedging, risk management and income Claims 13,602 10,036 enhancement. All calls sold are on assets held by the Group. Purchase of services 8,415 461 28. DETERMINATION OF FAIR VALUE AND FAIR VALUES HIERARCHY OF INVESTMENTS b) Due from related parties 4,312 6,222 The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy. The different levels have been defined as follows: c) Due to related parties 1,943 10,641 • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities d) Compensation of key management personnel • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from Salaries and other short term benefits 37,776 31,901 prices) End of service benefits 1,450 1,439 • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) Outstanding related party balances at reporting date are unsecured and interest free and no bad debt expense has been incurred during the year (2013: Nil). Level 1 Level 2 Level 3 Total December 31, 2014 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Held for trading 99,194 1,429,728 -- 1,528,922 Available for sale 4,522,132 -- -- 4,522,132 4,621,326 1,429,728 -- 6,051,054

December 31, 2013

Held for trading 59,753 151,159 -- 210,912 Available for sale 3,868,718 -- -- 3,868,718

3,928,471 151,159 -- 4,079,630

Page 110 Page 111 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT d) Asset liability management (ALM) framework The Group in the normal course of its business derives its revenue mainly from assuming Financial risks arise from open positions in interest rate, currency and equity and managing insurance and investments. Through a robust governance structure, risks products, all of which are exposed to general and specific market movements. The and returns are evaluated to produce sustainable revenues to reduce earnings volatility main risk that the Group faces due to the nature of its investments and liabilities and increase shareholders’ return. The Group’s lines of business are mainly exposed to is interest rate risk. The Group manages these positions within an ALM framework the following risks; that has been developed to achieve long-term investment returns in excess of its • Insurance risk, obligations under insurance and investment contracts. • Credit risk, The Group’s ALM is also integrated with the management of the financial risks • Liquidity risk, associated with the Group’s other financial assets and liabilities not directly • Market risk, and associated with insurance and investment liabilities. • Operational risks The Group’s ALM also forms an integral part of the insurance risk management a) Governance framework policy, to ensure in each period sufficient cash flow is available to meet liabilities The primary objective of the Group’s risk and financial management framework is to arising from insurance and investment contracts. protect the Group’s shareholders from events that hinder the sustainable achievement of the set financial performance objectives. Key management recognises the critical e) Insurance risk importance of having efficient and effective risk management systems in place. The principal risk the Group faces under insurance contracts is that the actual claims and benefit payments or the timing thereof, differ from expectations. This The Group has established a risk management function with clear terms of is influenced by the frequency of claims, severity of claims, actual compensation reference from the board of directors, its committees and the associated executive paid and subsequent development of long-term claims. Therefore the objective of management committees. This is supplemented with a clear organisational structure the Group is to ensure that sufficient reserves are available to cover these liabilities. with documented delegated authorities and responsibilities from the board of directors to executive management committees and senior managers. A group risk The Group manages the insurance risk through the careful selection and management policy framework which sets out the risk profiles for the Group, risk implementation of its underwriting strategy and guidelines together with the management, control and business conduct standards for the Group’s operations adequate reinsurance arrangements and proactive claims handling. has been put in place. The Group principally issues general insurance contracts which constitutes mainly b) Capital management framework marine & aviation, property & casualty and health & life. The Group has an internal risk management framework for identifying risks to which The concentration of insurance risk exposure is mitigated by careful selection and each of its business units and the Group as a whole is exposed, quantifying their implementation of the underwriting strategy of the Group, which attempts to ensure impact on economic capital. The internal framework estimates indicate how much that the risks underwritten are well diversified across a large portfolio in terms of capital is needed to mitigate the risk of insolvency to a selected remote level of type, level of insured benefits, amount of risk, industry and geography. Underwriting risk applied to a number of tests (both financial and non-financial) on the capital limits are in place to enforce risk selection criteria. position of the business. The Group, in the normal course of business, in order to minimise financial exposure c) Regulatory framework arising from large claims, enters into contracts with other parties for reinsurance Regulators are primarily interested in protecting the rights of the policyholders and purposes. Such reinsurance arrangements provide for greater diversification of monitor them closely to ensure that the Group is satisfactorily managing affairs for business, allow management to control exposure to potential losses arising from their benefit. At the same time, the regulators are also interested in ensuring that large risks, and provide additional capacity for growth. A significant portion of the Group maintains an appropriate solvency position to meet unforeseen liabilities the reinsurance is affected under treaty, facultative and excess-of-loss reinsurance arising from economic shocks or natural disasters. contracts. Amounts recoverable from reinsurers are estimated in a manner consistent The operations of the Group are also subject to regulatory requirements within the with the outstanding claims provision and are in accordance with the reinsurance jurisdictions where it operates. Such regulations not only prescribe approval and contracts. monitoring of activities, but also impose certain restrictive provisions (e.g. capital adequacy) to minimise the risk of default and insolvency on the part of the insurance companies to meet unforeseen liabilities as these arise. Page 112 Page 113 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Sensitivities e) Insurance risk (continued) The general insurance claims provisions are sensitive to the key assumptions Although the Group has reinsurance arrangements, it is not relieved of its direct mentioned above. It has not been possible to quantify the sensitivity of certain obligations to its policyholders and thus a credit exposure exists with respect to assumptions such as legislative changes or uncertainty in the estimation process. ceded insurance, to the extent that any reinsurer is unable to meet its obligations The analysis below is performed for possible movements in key assumptions with assumed under such reinsurance agreements. The Group’s placement of reinsurance all other assumptions held constant, showing the impact on gross and net liabilities, is diversified such that it is neither dependent on a single reinsurer nor are the net profit and equity. operations of the Group substantially dependent upon any single reinsurance contract. Change in Impact on Impact on Impact on assumptions liabilities net profit equity The Group has in place strict claim review policies to assess all new and ongoing (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) claims, regular detailed review of claims handling procedures and frequent December 31, 2014 investigation of possible fraudulent claims to reduce the risk exposure of the Group. The Group further enforces a policy of actively managing and prompt pursuing of Incurred claim cost +10% 240,668 (240,668) -- claims, in order to reduce its exposure to unpredictable future developments that can negatively impact the Group. Incurred claim cost -10% (240,668) 240,668 -- Key assumptions December 31, 2013 The principal assumption underlying the liability estimates is that the Group’s Incurred claim cost +10% 128,027 (128,027) -- future claims development will follow a similar pattern to past claims development experience. This includes assumptions in respect of average claim costs, claim Incurred claim cost -10% (128,027) 128,027 -- handling costs, claim inflation factors and claim numbers for each accident year. Claims Development Table Additional qualitative judgments are used to assess the extent to which past trends The Group maintains strong reserves in respect of its insurance business in order to may not apply in the future, for example one-off occurrence, changes in market protect against adverse future claims experience and developments. The following tables factors such as public attitude to claiming, economic conditions, as well as internal show the estimates of cumulative incurred claims, including both claims notified and factors such as portfolio mix, policy conditions and claims handling procedures. IBNR for each successive accident year at each reporting date, together with cumulative Judgment is further used to assess the extent to which external factors such as payments to date. The top half of each table below illustrates how the Group’s estimate judicial decisions and government legislation affect the estimates. of total claims outstanding for each accident year has changed at successive year-ends. The bottom half of the table reconciles the cumulative claims to the amount appearing Other key circumstances affecting the reliability of assumptions include variation in in the Consolidated Statement of Financial Position. interest rates, delays in settlement and changes in foreign currency rates.

Page 114 Page 115 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) f) Credit risk e) Insurance risk (continued) Credit risk is the risk that one party to a financial instrument will cause a financial Claims Development Table loss to the other party by failing to discharge an obligation. The following policies With the exception of the proportional and non-proportional reinsurance business, and procedures are in place to mitigate the Group’s exposure to credit risk. an accident-year basis is considered to be most appropriate for the business A credit risk policy setting out the assessment and determination of what written by the Group. Given the nature of reinsurance claims and the difficulties constitutes credit risk for the Group has been established and the following policies in identifying an accident year for each reported claim, these claims are reported and procedures are in place to mitigate the Group’s exposure to credit risk: separately and aggregated by reporting year (reporting year basis) – that is, with reference to the year in which the Group was notified of the claims. This presentation • Compliance with the receivable management policy is monitored and exposures is different from the basis used for the claims development tables for the other and breaches are regularly reviewed for pertinence and for changes in the risk insurance claims and entities of the Group, where the reference is to the actual date environment. of the event that caused the claim (accident-year basis). • For all classes of financial assets held by the Group, other than those relating Accident year 2009 2010 2011 2012 2013 2014 Total to reinsurance contracts, the maximum credit risk exposure to the Group is the carrying value as disclosed in the consolidated financial statements at the At end of accident reporting date. year 953,805 1,176,469 1,529,715 1,320,038 1,825,596 2,410,587 • Reinsurance is placed with reinsurers approved by the management. To minimise One year later 941,170 1,119,774 1,613,432 1,279,177 1,758,671 -- its exposure to significant losses from reinsurer insolvencies, the Group evaluates Two years later 870,688 1,097,686 1,549,986 1,330,732 -- -- the financial condition of its reinsurers and monitors concentrations of credit risk Three years later 911,729 1,122,202 1,581,236 ------arising from similar geographic regions, activities or economic characteristics of the reinsurers. Four years later 913,710 1,115,284 ------At each reporting date, management performs an assessment of creditworthiness Five years later 924,879 ------of reinsurers and updates the reinsurance purchase strategy, ascertaining suitable Current estimate of allowance for impairment. cumulative claims Credit exposure is limited to the carrying values of the financial assets as at the incurred 924,879 1,115,284 1,581,236 1,330,732 1,758,671 2,410,587 9,121,389 reporting date. Cumulative payments to date (854,061) (1,002,778) (1,377,148) (1,080,017) (1,259,149) (778,546) (6,351,699) Net outstanding claims provision 70,818 112,506 204,088 250,715 499,522 1,632,041 2,769,690 Reserve in respect of prior years (Before 2009) ------87,496 Total net outstanding claims provision ------2,857,186 Current estimate of surplus/(deficiency) 28,926 61,185 (51,521) (10,694) 66,925 % Surplus/ (deficiency) of initial gross reserve 3% 5% (3%) (1%) 4% Page 116 Page 117 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Age analysis of financial assets f) Credit risk (continued) December 31, 2014 Credit exposure by credit rating The table below provides information regarding the credit risk exposure of the Group 31 to 60 61 to 90 91 to 120 Above by classifying assets according to the Group’s credit ratings of counterparties. <30 days days days days 121days Total (QR 000) (QR ‘000) (QR ‘000) (QR‘000) (QR ‘000) (QR‘000) Neither past Cash and cash due nor Past due but Past due and equivalents 1,166,304 1,025,503 366,288 -- 88,812 2,646,907 impaired not impaired impaired Total Insurance December 31, 2014 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) and other Non-derivative financial receivables 872,203 178,193 752,166 115,529 243,685 2,161,776 assets 2,038,507 1,203,696 1,118,454 115,529 332,497 4,808,683 Available-for-sale financial assets December 31, 2013 -Debt securities 1,964,620 -- -- 1,964,620 31 to 60 61 to 90 91 to 120 Above Insurance receivables 1,842,898 212,692 30,991 2,086,581 <30 days days days days 121days Total Reinsurance contract assets 1,829,515 -- -- 1,829,515 (QR 000) (QR ‘000) (QR ‘000) (QR‘000) (QR ‘000) (QR‘000) Cash and cash equivalents 2,646,907 -- -- 2,646,907 Cash and cash 8,283,940 212,692 30,991 8,527,623 equivalents 1,303,723 522,108 917,937 546,710 61,427 3,351,905 December 31, 2013 Insurance and other Non- derivative financial receivables 484,480 130,006 109,428 100,730 223,479 1,048,123 assets 1,788,203 652,114 1,027,365 647,440 284,906 4,400,028 Available-for-sale financial assets -Debt securities 1,566,151 -- -- 1,566,151 Insurance receivables 785,523 173,610 24,935 984,068 Reinsurance contract assets 1,269,167 -- -- 1,269,167 Cash and cash equivalents 3,351,905 -- -- 3,351,905 Total 6,972,746 173,610 24,935 7,171,291

Page 118 Page 119 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) December 31, 2014 f) Credit risk (continued) Up to a Over 5 Impaired financial assets year 1-5 years years Total At December 31, 2014, there are impaired reinsurance assets of QR 21,417 thousand (2013: QR 17,896 thousands), impaired insurance and other receivables of QR 9,574 (QR ‘000) (QR ‘000) (QR ‘000) (QR‘000) thousand (2013: QR 7,039 thousand). Financial assets The Group records all impairment allowances in separate impairment allowances Non-derivative financial assets accounts. The movement in the allowances for impairment losses for the year are as Held for trading investments 1,528,922 -- -- 1,528,922 follows: Available-for-sale financial assets Impairment on insurance Impairment on Equity securities 2,978,565 - - 2,978,565 and reinsurance receivables investments Debt securities 79,188 1,086,330 799,102 1,964,620 2014 2013 2014 2013 Insurance receivables 2,086,581 -- -- 2,086,581 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Reinsurance contract assets 1,829,515 -- -- 1,829,515 At January 1, 24,935 18,682 745 -- Cash and cash equivalents 2,646,907 -- -- 2,646,907 Charged/ (utilised) 11,149,678 1,086,330 799,102 13,035,110 during the year 6,056 6,253 3,280 745 Total 30,991 24,935 4,025 745 Up to a Over 5 year 1-5 years years Total g) Liquidity risk (QR ‘000) (QR ‘000) (QR ‘000) (QR 000) Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities. Financial liabilities Liquidity requirements are monitored regularly on a daily/weekly/monthly basis and Non-derivative financial liabilities management ensures that sufficient funds are available to meet any commitments Trade and other payables 632,390 -- -- 632,390 as they arise. Insurance contract liabilities 4,686,701 -- -- 4,686,701 Maturity profiles Insurance payables 641,508 -- -- 641,508 The table below summarises the maturity profile of the financial assets and financial Short term borrowings 182,000 -- -- 182,000 liabilities of the Group based on remaining undiscounted contractual obligations, 6,142,599 -- -- 6,142,599 including interest payable and receivable. For insurance contracts liabilities and reinsurance assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognised insurance liabilities. Unearned premiums and the reinsurers’ share of unearned premiums have been excluded from the analysis as they are not contractual obligations.

Page 120 Page 121 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) i) Currency risk Currency risk is the risk that the fair value of future cash flows of a financial g) Liquidity risk (continued) instrument will fluctuate because of changes in foreign exchange rates. December 31, 2013 The Group uses various off balance sheet financial instruments, including forward Up to a Over 5 foreign exchange contracts and option, to manage certain foreign currency year 1-5 years years Total investment exposures and for trading. (QR ‘000) (QR ‘000) (QR ‘000) (QR‘000) The table below summarises the Group’s exposure to foreign currency exchange rate Financial assets risk at the reporting date by categorising assets and liabilities and major currencies. Non-derivative financial assets December 31, 2014 Held for trading investments 210,912 -- -- 210,912 USD EURO GBP Others Total Available-for-sale financial assets (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Equity securities 2,685,952 -- -- 2,685,952 Cash and cash 779,796 178,793 607,562 1,566,151 Debt securities equivalents 502,073 23,776 73,670 2,047,388 2,646,907 Insurance receivables 984,068 -- -- 984,068 Insurance and other Reinsurance contract assets 1,269,167 -- -- 1,269,167 receivables 1,124,824 109,391 117,500 1,468,313 2,820,028 Cash and cash equivalents 3,351,905 -- -- 3,351,905 Investments 1,986,862 92,821 224,160 4,164,239 6,468,082 9,281,800 178,793 607,562 10,068,155 TOTAL ASSETS 3,613,759 225,988 415,330 7,679,940 11,935,017 Short term borrowing 182,000 ------182,000 Up to a Over 5 year 1-5 years years Total Provisions, reinsurance and other payables 73,415 5,310 1,997 1,580,037 1,660,759 (QR ‘000) (QR ‘000) (QR ‘000) (QR 000) TOTAL LIABILITIES 255,415 5,310 1,997 1,580,037 1,842,759 Financial liabilities Non-derivative financial liabilities December 31, 2013 Trade and other payables 243,491 -- -- 243,491 USD EURO GBP Others Total Insurance contract liabilities 2,603,054 -- -- 2,603,054 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Insurance payables 424,906 -- -- 424,906 Cash and cash equivalents 141,912 43,925 37,483 3,128,585 3,351,905 Short term borrowings 746,200 -- -- 746,200 Insurance and other 4,017,651 -- -- 4,017,651 receivables 169,231 18,058 50,798 926,528 1,164,615 h) Market risk Investments 1,328,691 56,633 5,686 3,071,260 4,462,270 Market risk is the risk that the fair value of or income from a financial instrument will fluctuate as a result of changes in market prices (such as exchange rates, interest TOTAL ASSETS 1,639,834 118,616 93,967 7,126,373 8,978,790 rates and equity prices) , whether those changes are caused by factors specific to the individual security, or its issuer, or factors affecting all securities traded in the Short term borrowing 746,200 ------746,200 market. The Group limits market risk by maintaining a diversified portfolio and by continuous monitoring of developments in international and local equity and bond Provisions, reinsurance markets. In addition, the Group actively monitors the key factors that affect stock and other payables 163,184 3,448 5,751 737,622 910,005 and bond market movements, including analysis of the operational and financial TOTAL LIABILITIES 909,384 3,448 5,751 737,622 1,656,205 performance of investees. Page 122 The Group has no significant concentration of currency risk. Page 123 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) The analysis below is performed for reasonably possible movements in key variables i) Currency risk (CONTINUED) with all other variables held constant, showing the impact on profit or loss and equity. The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on the consolidated December 31, 2014 December 31, 2013 statements of income and changes in equity due to changes in the fair value of currency sensitive monetary assets and liabilities including insurance contract Changes Impact Impact on liabilities. in on profit Impact profit or Impact on variables or loss on equity loss equity December 31, 2014 December 31, 2013 (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) Changes Impact Impact on Currency in on profit Impact profit or Impact on variables or loss on equity loss equity Qatari Riyals +50 basis 1,779 (68,237) 6,662 (59,128) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) points Qatari Riyals -50 basis (1,779) 68,237 (6,662) 59,128 Currency points Euro +10% 18,536 5,750 7,133 10 The Group’s interest rate risk based on contractual arrangements is as follows: GBP +10% 19,597 679 8,253 469 December 31, 2014 Total 38,133 6,429 15,386 479 Effective Up to 1 1 to 5 Over 5 interest year years years Total rate (%) Euro -10% (18,536) (5,750) ( 7,133) ( 10) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) GBP -10% (19,597) (679) (8,253) (469) Cash and Cash 2,646,907 -- 2,646,907 1.18% Total (38,133) (6,429) (15,386) (479) equivalents --

The method used for deriving sensitivity information and significant variables did Investments 79,188 1,086,330 799,102 1,964,620 3.83% not change from the previous period. 2,726,095 1,086,330 799,102 4,611,527 ii) Interest rate risk Interest rate risk is the risk that the value of future cash flows from a financial instrument will fluctuate because of changes in market interest rates. December 31, 2013 Effective The Group invests in securities and has deposits that are subject to interest rate risk. Up to 1 1 to 5 Over 5 interest Interest rate risk to the Group is the risk of changes in market interest rates reducing year years years Total rate (%) the overall return on its interest bearing securities. (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) The Group’s interest risk policy requires managing interest rate risk by maintaining Cash and Cash 3,351,905 -- -- 3,351,905 1.58% an appropriate mix of fixed and variable rate instruments. The policy also requires equivalents it to manage the maturities of interest bearing financial assets and interest bearing financial liabilities. Investments 779,796 178,793 607,562 1,566,151 4.16% The Group limits interest rate risk by monitoring changes in interest rates in the 4,131,701 178,793 607,562 4,918,056 currencies in which its cash and investments are denominated and has no significant concentration of interest rate risk.

Page 124 Page 125 Notes to the consolidated financial statements

30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) manuals with effective segregation of duties, access controls, authorisation and iii) Price risk reconciliation procedures, staff training and assessment processes etc. with an Price risk is the risk that the fair value of or income from a financial instrument will effective compliance and internal audit framework. Business risks such as changes fluctuate because of changes in market prices (other than those arising from interest in environment, technology and the industry are monitored through the Group’s rate risk or currency risk), whether those changes are caused by factors specific to strategic planning and budgeting process. the individual financial instrument or its issuer, or factors affecting all similar financial j) Capital management instruments traded in the market. Externally imposed capital requirements are set and regulated by the Qatar Commercial The Group’s equity price risk exposure relates to financial assets and financial Companies’ Law and Qatar Exchange to ensure sufficient solvency margins. Further liabilities whose values will fluctuate as a result of changes in market prices, principally objectives are set by the Group to maintain a strong credit rating and healthy capital investment securities not held for the account of unit-linked business. The Group’s ratios in order to support its business objectives and maximise shareholders value. price risk policy requires it to manage such risks by setting and monitoring objectives The Group manages its capital requirements by assessing shortfalls between reported and constraints on investments, diversification plans, limits on investments in each and required capital levels on a regular basis. The Group fully complied with the externally country, sector and market and careful and planned use of derivative financial imposed capital requirements during the reported financial year and no changes were instruments. The Group has no significant concentration of price risk. made to its capital base, objectives, policies and processes from the previous year. The analysis below is performed for reasonably possible movements in key variables k) Classification and fair values with all other variables held constant, showing the impact on profit or loss and equity. The following table compares the fair values of the financial instruments to their carrying December 31, 2014 December 31, 2013 values: Changes Impact on Impact on December 31, 2014 December 31, 2013 in profit or Impact on profit or Impact on Carrying Carrying variables loss equity loss equity amount Fair value amount Fair value (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000) (QR ‘000)

Cash and cash equivalents 2,646,907 2,646,907 3,351,905 3,351,905 Qatar Market +10% -- 189,811 -- 177,521

International Markets +10% 152,892 65,605 21,091 51,254 Loans and receivables: - - Insurance receivables 2,086,581 2,086,581 984,068 984,068 Qatar Market -10% -- (189,811) -- (177,521) Reinsurance contract assets 1,829,515 1,829,515 2,151,318 2,151,318 International Markets -10% (152,892) (65,605) (21,091) (51,254) Investments held for trading 1,528,922 1,528,922 210,912 210,912 Available -for-sale Investments 4,939,160 4,939,160 4,251,358 4,251,358 The method used for deriving sensitivity information and significant variables did not change from the previous period. 13,031,085 13,031,085 10949561 10,949,561 iv) Operational risks Operational risk is the risk of loss arising from system failure, human error, fraud Short term borrowings 182,000 182,000 746,200 746,200 or external events. When controls fail to perform, operational risks can cause Insurance and other payables 1,660,759 1660,759 910,005 910,005 damage to reputation, have legal or regulatory implications or can lead to financial Insurance contract liabilities 4,686,701 4,686,701 4,594,615 4,594,615 loss. The Group cannot expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risks, the 6,529,460 6,529,460 6,250,820 6,250,820 Group is able to manage the risks. The Group has detailed systems and procedures

Page 126 Page 127 Notes to the consolidated financial statements

31. CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES ascertaining its impact on the recoverable amount and impairment to the carrying value In the process of preparing these consolidated financial statements, Management has of goodwill in the consolidated financial statements. Material changes in the above made use of a number of judgments relating to the application of accounting policies assumptions may impact the recoverable amounts and may lead to an impairment to which are described in note 3 (d). Those which have the most significant effect on the goodwill. reported amounts of assets, liabilities, income and expense are listed below (apart from those involving estimations which are dealt within note 32). 32. KEY SOURCES OF ESTIMATES UNCERTAINTY These judgments are based on historical experience and other factors, including The key assumptions concerning the future, and other key sources of estimation expectations of future events that are believed to be reasonable under the circumstances. uncertainty at the reporting date, that have a significant risk of causing a material Management believes that the following discussion addresses the accounting policies adjustment to the carrying amounts of assets and liabilities within the next financial that require judgments. year, are discussed below; Classification of investments Claims made under insurance contracts Quoted securities are classified either held for trading or as available for sale. The Group Claims and loss adjustment expenses are charged to the consolidated statement of invests substantially in quoted securities either locally or overseas and management has income as incurred based on the estimated liability for compensation owed to contract primarily decided to account for them for their potential long term growth rather than holders or third parties damaged by the contract holders. Liabilities for unpaid claims the short term profit basis. Consequently, such investments are recognized as available are estimated using the input of assessments for individual cases reported to the Group for sale rather than at fair value through profit or loss. and management estimations for the claims incurred but not reported. The method for making such estimates and for establishing the resulting liability is continually reviewed. Financial assets are classified as fair value through profit or loss where the assets are Any difference between actual claims and the provisions made are included in the either held for trading or designated as at fair value through profit or loss. The Group consolidated statement of income in the year of settlement. As of December 31, 2014, invests in mutual and managed funds for trading purpose. the estimate for unpaid claims amounted to QR 2,857,186 thousand (2013: QR 1,333,887 Impairment of financial assets thousand). The Group determines whether available for sale equity financial assets are impaired Impairment of Insurance and other receivables when there has been a significant or prolonged decline in their fair value below cost. An estimate of the collectible amount of insurance and other receivables is made when This determination of what is significant or prolonged requires considerable judgment collection of the full amount is no longer probable. This determination of whether these by the management. In making this judgment and to identify whether impairment insurance and other receivables are impaired, entails the Group evaluating the credit has occurred, the Group evaluates among other factors, the normal volatility in share and liquidity position of the policy holders and the insurance companies, historical price, the financial health of the investee, industry and sector performance, changes in recovery rates including detailed investigations carried out during 2014 and feedback technology and operational and financial cash flows. received from their legal department. The difference between the estimated collectible amount discounted to present value if applicable and the book amount is recognized as Impairment of goodwill an expense in the consolidated statement of income. Any difference between amounts The Group carries out impairment testing annually in respect of the goodwill relating to actually collected in the future periods and the amounts expected will be recognized the acquired subsidiaries. In carrying out the impairment analysis, the Group makes the in the consolidated statement of income at the time of collection. As of December 31, following estimates which are critical: 2014, the carrying values of insurance receivable and reinsurance receivables amounted Growth rate to QR. 962,800 thousand (2013: 380,556 thousand) and QR. 1,154,772 thousands (2013: Management uses the projected cash flows over a 5 year horizon. The growth rate used QR 628,447 thousand) respectively and the provision for impairment on insurance in determining the projected cash flows is estimated by taking in account the nature of receivable and reinsurance receivable amounted to QR 9,574 thousand (2013: QR 7,039 the industry and the general economic growth relevant to the subsidiary in question and thousand) and QR 21,417 thousand (2013: QR 17,896 thousand) respectively. the Group At each reporting date, liability adequacy tests are performed to ensure the adequacy Discount rate of insurance contract liabilities. The Group makes use of the best estimates of future The Management discounts the cash flows using its weighted average cost of capital contractual cash flows and claims handling and administration expenses, as well as which takes in to account the debt-equity structure of the Group, an estimated cost of investment income from the assets backing such liabilities in evaluating the adequacy equity based on the capital asset pricing model and an estimated long term cost of debt. of the liability. Any deficiency is immediately charged to the consolidated statement of The Management performs sensitivity analysis on the above and key assumptions in income. Page 128 Page 129 Notes to the consolidated financial statements

QIC’c Global 33. PARENTAL GUARANTEE The Parent Company has provided unconditional parental guarantees to its subsidiary companies - QIC International LLC., Qatar Reinsurance Company LLC. (QatarRe), Q - Life Footprint & Medical Insurance Company LLC., Kuwait Qatar Insurance Company and QIC Europe Ltd, for the purpose of obtaining a financial rating from international rating agencies.

34. OTHER EVENTS On November 23, 2014, the general assembly meeting approved the issuance of Convertible Notes in accordance with Article No. (168 - 179) of Qatar Commercial Companies Law and according to the terms and conditions determined by the Board of Directors. The notes will have a maturity of five years and principal amount of QAR 910 million. It could be converted into fully paid ordinary shares after three years from the date of issuance. The notes will be issued after obtaining the necessary approvals from the concerned authorities. In addition, the extraordinary general assembly meeting at the same date, principally approved, the increase in the share capital of the Company which could result from conversion of the notes into ordinary shares at the conversion date in accordance with Article (3/190 - 198) of Qatar Commercial Companies Law.

35. COMPARATIVE FIGURES Certain Comparative figures for the previous year have been reclassified, where necessary, in order to conform to the current year’s presentation. Such reclassification do not affect the previously reported financial performance, net assets or equity.

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Insurance

Qatar UAE Oman Qatar Insurance Company QIC Dubai Branch Office Oman Qatar Insurance Tamin Street, West Bay, Al Dana Centre Building, Company P.O. Box: 666, 2nd Floor, Flat No. 206 Postal Code 112, Doha, Qatar Al Maktoum Street, Ruwi, P.O. Box: 3660 Tel: +974 44962 222 Deira Sultanate of Oman Call Center: 8000QIC742 P.O. Box: 4066 Tel: + 968 24700798 Email: [email protected] Dubai, UAE Email: [email protected] www.qatarinsurance.com Tel: +9714 2224045 www.oqic.com Branch Offices in Doha Email: [email protected], Motor Claims ( Abu Hamour) [email protected] Malta Lulu Hypermarket (Gharafa) www.qatarinsurance.com QIC Europe Limited 4th Floor, Block C, Villaggio Branch QIC Abu Dhabi Branch Office Al Khor (CBQ) Branch Skyway Offices, 15th Floor, NBAD Building, Muaither Branch 179 Marina Street, Hamdan/Salam Street Junction, Pieta, PTA 9042, QIC’s Global QIC International LLC P. O. Box: 73797 Malta Tamin Street, West Bay, Abu Dhabi, UAE Tel: + 356 27041001 P.O. Box: 12713 Tel: +9712 676 9466 www.qatarinsurance.com Footprint Doha, Qatar Email: [email protected] Tel: +974 449 62484 www.qatarinsurance.com QICI Malta Email: [email protected] Tamin Street, West Bay, www.qatarinsurance.com Kuwait P.O. Box: 666, Damaan Islamic Insurance Kuwait Qatar Insurance Doha, Qatar Tel: +974 44962 222 Company (Beema) Company th www.qatarinsurance.com 8th Floor, 8 Floor, Burj Jassim, Qatar First Investment Bank Al Soor Street, Mirgab, Building, Kuwait Suhaim Bin Hamad Street, P. O. Box: 25137, Safat: 13112 Al Sadd, Tel: +965 22960131/41/51/61 P.O. Box: 11068, Email: [email protected] Doha, Qatar www.qickwt.com Tel: +974 40 50 555 Email: [email protected] www.beema.com.qa Investment & Reinsurance Advisory Services Life and Medical Qatar Reinsurance Qatar Qatar Kuwait Company LLC Q Life & Medical Insurance Qatar Economic Advisors Kuwait Qatar Insurance Tamin Street, West Bay, Company LLC Company Qatar th P.O. Box: 666 Tamin Street, West Bay, 8 Floor, Burj Jassim, Headquarters Doha, Qatar PO Box : 201233, Doha - Qatar Al Soor Street, Mirgab th 8 Floor, QIC Building, Tel: +974 44962 222 Tel. : +974 44040650 P. O. Box: 25137, Safat: 13112 Tamin Street, West Bay, Email: [email protected] Email: [email protected] Kuwait P.O. Box: 24938 www.qlm.com.qa Tel: + 965 22960131/41/51/61 www.qatarinsurance.com Doha, Qatar Email: [email protected] Tel: +974 4499 4777 UAE www.qickwt.com www.qatarreinsurance.com Bermuda QIC Dubai (Branch Office) CATCo Investment Zurich Al Dana Centre Building, Management Ltd. 2nd Floor, Flat No. 206 Branch Office nd Oman 2 Floor, S E Pearman Building, Al Maktoum Street, Deira Bleicherweg 72, Oman Qatar Insurance 9, Par-La-Ville Road, P.O Box. 4066 8002 Zurich Hamilton, HM 11, Bermuda Dubai, UAE Company Switzerland Tel: +1441 531 2227 Tel: + 9714 2224045 Postal Code 112, Tel: +41 44 207 85 85 Email: [email protected] Email: [email protected] Ruwi, www.qatarreinsurance.com www.qatarinsurance.com [email protected] P.O. Box: 3660 www.qatarinsurance.com Sultanate of Oman Tel: + 968 24700 798 London Representative Office British Virgin Islands Email: [email protected] QIC Abu Dhabi (Branch Office) Suite 2/10, Epicure Managers Qatar Ltd. www.oqic.com 15th Floor, NBAD Building London Underwriting Centre, Trinity Chambers, Hamdan/Salam Street Junction, 3 Minster Court, Mincing Lane, Road Town, P.O. Box: 73797 London EC3R 7DD Tortola, Abu Dhabi, UAE United Kingdom P.O. Box: 4301 Tel: + 9712 676 9466 Tel: +44 203 0088 607 British Virgin Islands Email: [email protected] www.qatarreinsurance.com Email: [email protected] www.qatarinsurance.com www.qatarinsurance.com

Bermuda Branch Office Overbay, Real Estate Lloyd’s Market 106 Pitts Bay Road, Pembroke, HM08 Qatar London Bermuda QIC Real Estate Antares Managing Agency Limited Tel: +1441 599 9192 Tamin Street, West Bay, (managing Antares Syndicate 1274 at Lloyd’s) www.qatarreinsurance.com P.O. Box: 11488 10 Lime Street, Doha, Qatar London, Tel: +974 44962 442 EC3M 7AA Email: [email protected] Tel: +44 (0)20 7959 1900 www.qatarinsurance.com Email: [email protected] www.antaresunderwriting.com

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